how is mobile recharge commission treated in gst

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Bhaskar (Querist)
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18 July 2017 I'm doing recharge business. daily Rs6-7K recharge is done. for every Rs1K recharge I'm getting commission of Rs30. how is commission treated in gst ? should I get registered as total TO is Rs20K waiting for ur reply

Anand

Anand (Expert)
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19 July 2017 If your total turnover is only Rs. 20,000/- you need not be registered for GST.

Bhaskar

Bhaskar (Querist)
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19 July 2017 sorry it is Rs20L

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 In India, the treatment of GST on commission earned from mobile recharge business depends on various factors, including whether you are providing a taxable service and if you need to register for GST. Here’s a detailed explanation:

### 1. **GST Treatment on Mobile Recharge Commission**

#### a. **Nature of Service**

- **Commission Income**: If you are earning commission from mobile recharge services, this is considered as a service provided to the service provider (like a telecom company). The commission earned is subject to GST.

- **GST Rate on Commission**: The GST rate applicable to commission income for services like mobile recharges generally falls under the category of "Business Support Services" or "Other Services," and the standard GST rate of 18% applies.

#### b. **Input Tax Credit (ITC)**

- **ITC on Commission**: As a commission agent, you are typically not allowed to claim Input Tax Credit (ITC) on the commission received because the commission is earned from services and does not involve any purchase of goods or services that would be eligible for ITC.

### 2. **GST Registration Requirements**

#### a. **Threshold Limit**

- **Threshold for GST Registration**: As per the current GST regulations, if your aggregate turnover exceeds ₹20 lakhs (₹10 lakhs for special category states) in a financial year, you are required to obtain GST registration.

- **Aggregate Turnover Calculation**: Aggregate turnover includes the total value of all taxable supplies (including the commission earned), exempt supplies, and export supplies, among other components.

- **For Your Case**: If your total turnover (including commissions) is ₹20 lakhs or more in a financial year, you must register for GST. Given your commission of ₹30 per ₹1,000 recharge and a daily recharge volume of ₹6,000 to ₹7,000, your annual commission income would be around ₹7.2 lakhs to ₹8.4 lakhs, which is below the ₹20 lakh threshold by itself. However, you should also consider other sources of income, if any, to ensure compliance.

### 3. **Filing GST Returns**

- **Monthly/Quarterly Returns**: Once registered, you need to file GST returns. The returns include details of your sales, the GST collected on commissions, and any other details as required by GST laws.

- **GSTR-1**: Details of outward supplies and commissions earned should be reported in GSTR-1.

- **GSTR-3B**: You will need to pay the GST on the commission earned and file GSTR-3B, which summarizes the GST liabilities and Input Tax Credits.

### 4. **Documentation and Compliance**

- **Invoicing**: Issue invoices for the commission received as per GST norms. Ensure that the invoices have GST details and comply with the GST format.

- **Record-Keeping**: Maintain records of all transactions, including commission earnings, invoices issued, and GST collected.

### 5. **Steps to Take**

1. **Determine Aggregate Turnover**: Calculate your total turnover including all sources of income to confirm if you exceed the ₹20 lakh threshold.

2. **Apply for GST Registration**: If your turnover exceeds the threshold or if you choose to register voluntarily, apply for GST registration online through the GST portal.

3. **Comply with GST Filing**: Once registered, ensure regular filing of GST returns and payment of applicable GST on commission.

4. **Consult a Tax Professional**: For specific advice and assistance in registration and compliance, consult with a tax professional or GST consultant.

### Summary

- **GST on Commission**: Commission earned from mobile recharges is subject to 18% GST.
- **Registration Requirement**: If your aggregate turnover exceeds ₹20 lakhs, you must register for GST.
- **Filing**: File GST returns regularly and ensure compliance with GST laws.

For precise advice tailored to your specific situation, especially if you have other income sources or if regulations change, consult a GST professional.