EFFECT OF GST ON COMMISSION AGENTS & REGISTRATION

This query is : Resolved

GAUTAM BANKA (Querist)
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20 August 2017 Hi please let me know the effect of GST on commission agent i.e textiles based and the Registration process ?

Sunil

Sunil (Expert)
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20 August 2017 If you are getting commission on sale / purchase of any goods or services you have to compulsorily register irrespective of your turnover and you will be deemed to be the receiver or supplier of the goods on behalf of your principal. You will be jointly and severally required to discharge all GST liabilities of your principal as well as your own. Your location will be deemed to be the place of supply. Eg if you are providing commission agent service from Maharashtra and your Principal is in Gujarat, if he makes a supply through you to someone in West Bengal, even if the truck goes directly to West Bengal he will have to bill to you in Maharashtra and levy IGST in Gujarat and you will bill to customer in West Bengal from Maharashtra and levy IGST and take ITC of the IGST your principal paid. Your principal will have the discretion of billing to you at open market rate of the goods he supplies to you or at 90% or more of the rate you will charge to the final customer.

This is the first component of transaction of the goods or services. The second component is your fee for commission. You will have to bill him for your commission fee you charge. On this there will be GST of 18% IGST in the above example. You can use your other IGST / CGST / SGST ITC to discharge this liability and he will get ITC of the IGST you will levy to him.

VIPIN KUTUMBALE

VIPIN KUTUMBALE (Expert)
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17 August 2018 Please read section 24 where only person who make supply on behalf of other (principal) it means he make supply on behalf of other , where commission paid on makketing of product will not required the registration ? only suggest name of prospective customer

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