Gst payment & rate???
This query is : Resolved
20 July 2017
If I am working as a commission agent, I am buying service for our client & selling with margin, then I have to pay GST @ 18% of my margin or not. If I am getting commission after deduction of TDS @ 5% also from our Supplier for this, then should I liable to pay GST on commission also or not?
21 July 2017
18% charged on full taxable value not on margin.
Even TDS deducted you have to pay tax on it.
Even TDS deducted you have to pay tax on it.
23 July 2017
Dear Mam,
Thanks for reply.
If I am purchasing service of Rs. 10,000 for our client and I am getting commission from our supplier of Rs.950 after TDS deduction of Rs.50 on it, I have to pay only 9000 for this service, If my supplier is not charging GST.
Now I am selling this service from my client @ 12000 then should I charge GST @ 18% on total 12000 or I can charge only on Profit Margin @ 2000
How can I calculate GST on this both transaction (Purchase & Sell)?
Thanks for reply.
If I am purchasing service of Rs. 10,000 for our client and I am getting commission from our supplier of Rs.950 after TDS deduction of Rs.50 on it, I have to pay only 9000 for this service, If my supplier is not charging GST.
Now I am selling this service from my client @ 12000 then should I charge GST @ 18% on total 12000 or I can charge only on Profit Margin @ 2000
How can I calculate GST on this both transaction (Purchase & Sell)?
27 July 2024
When acting as a commission agent and dealing with services on behalf of clients, understanding the GST implications is crucial. Here’s how you can handle the GST on both your commission and the service transactions:
### 1. **GST on Commission Income**
As a commission agent, the GST treatment on your commission income is as follows:
- **Rate of GST on Commission Income:** The standard rate of GST on commission income is 18%.
- **Calculation of GST on Commission Income:** You are required to pay GST on the commission you receive, which is your margin.
- **Example Calculation:**
- If you receive a commission of ₹950, after TDS deduction of ₹50 (net ₹900), you need to calculate GST @ 18% on ₹950.
- GST = ₹950 × 18% = ₹171.
- **TDS Impact:** The TDS deducted by your supplier does not affect the GST calculation. You pay GST on the total commission amount received, regardless of TDS deductions.
### 2. **GST on Service Purchase and Sale**
Here’s how you should handle GST for the service you purchase and sell:
- **When You Purchase Service:**
- If your supplier is not charging GST, you are not able to claim any Input Tax Credit (ITC) on the service you purchase. However, you are still required to account for GST on the margin or commission if applicable.
- **When You Sell Service:**
- Since you are providing a service and charging a margin, you should charge GST on the full amount of the service you sell to your client.
- **Rate of GST on Service Sale:** The applicable GST rate depends on the nature of the service provided. Typically, services are taxed at 18% unless specifically exempt or taxed at a different rate.
- **Example Calculation:**
- **Purchase:** You purchase a service for ₹10K (no GST charged).
- **Sell:** You sell the same service for ₹12K
- **GST on Sale:** You should charge GST @ 18% on the ₹12K (total sale amount), not just on the margin.
- GST = ₹12K × 18% = ₹2,160.
### Summary:
1. **GST on Commission Income:**
- **Rate:** 18%.
- **Basis:** Total commission received.
2. **GST on Service Transactions:**
- **Purchase:** No GST on purchase means no ITC can be claimed.
- **Sale:** Charge GST @ 18% on the total sale amount (₹12K in this case).
### Filing and Compliance:
- **Input Tax Credit (ITC):** Since no GST was charged on the purchase, you cannot claim ITC.
- **GSTR-1 & GSTR-3B:** Report the total sale value including GST in your GSTR-1 and GSTR-3B returns. GST on commission income should be shown under the respective HSN/SAC codes for commission services.
### Additional Notes:
- **Keep Accurate Records:** Maintain accurate records of all invoices and TDS deductions to ensure compliance and proper reporting.
- **Consult with a Tax Professional:** For specific scenarios or complex transactions, consulting with a tax professional or GST consultant may help ensure compliance and accurate GST calculations.
Feel free to ask if you need further clarification on any of these points!
### 1. **GST on Commission Income**
As a commission agent, the GST treatment on your commission income is as follows:
- **Rate of GST on Commission Income:** The standard rate of GST on commission income is 18%.
- **Calculation of GST on Commission Income:** You are required to pay GST on the commission you receive, which is your margin.
- **Example Calculation:**
- If you receive a commission of ₹950, after TDS deduction of ₹50 (net ₹900), you need to calculate GST @ 18% on ₹950.
- GST = ₹950 × 18% = ₹171.
- **TDS Impact:** The TDS deducted by your supplier does not affect the GST calculation. You pay GST on the total commission amount received, regardless of TDS deductions.
### 2. **GST on Service Purchase and Sale**
Here’s how you should handle GST for the service you purchase and sell:
- **When You Purchase Service:**
- If your supplier is not charging GST, you are not able to claim any Input Tax Credit (ITC) on the service you purchase. However, you are still required to account for GST on the margin or commission if applicable.
- **When You Sell Service:**
- Since you are providing a service and charging a margin, you should charge GST on the full amount of the service you sell to your client.
- **Rate of GST on Service Sale:** The applicable GST rate depends on the nature of the service provided. Typically, services are taxed at 18% unless specifically exempt or taxed at a different rate.
- **Example Calculation:**
- **Purchase:** You purchase a service for ₹10K (no GST charged).
- **Sell:** You sell the same service for ₹12K
- **GST on Sale:** You should charge GST @ 18% on the ₹12K (total sale amount), not just on the margin.
- GST = ₹12K × 18% = ₹2,160.
### Summary:
1. **GST on Commission Income:**
- **Rate:** 18%.
- **Basis:** Total commission received.
2. **GST on Service Transactions:**
- **Purchase:** No GST on purchase means no ITC can be claimed.
- **Sale:** Charge GST @ 18% on the total sale amount (₹12K in this case).
### Filing and Compliance:
- **Input Tax Credit (ITC):** Since no GST was charged on the purchase, you cannot claim ITC.
- **GSTR-1 & GSTR-3B:** Report the total sale value including GST in your GSTR-1 and GSTR-3B returns. GST on commission income should be shown under the respective HSN/SAC codes for commission services.
### Additional Notes:
- **Keep Accurate Records:** Maintain accurate records of all invoices and TDS deductions to ensure compliance and proper reporting.
- **Consult with a Tax Professional:** For specific scenarios or complex transactions, consulting with a tax professional or GST consultant may help ensure compliance and accurate GST calculations.
Feel free to ask if you need further clarification on any of these points!
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