Insurance agent
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 October 2018
Dear Experts
Assesee is a LIC commission agent receiving Rs 20,000 per month (approx) in her bank account. Whether GST is applicable on this. Whether she has to get voluntarily registered as GST registration is compulsory for commission agents.
Assesee is a LIC commission agent receiving Rs 20,000 per month (approx) in her bank account. Whether GST is applicable on this. Whether she has to get voluntarily registered as GST registration is compulsory for commission agents.
08 October 2018
GST Registration is not required in this case.
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 October 2018
But My doubt is that list of compulsory registration u/s 24 covers agent also right ?.
Please claerify
Please claerify
01 August 2024
Yes, GST is applicable to insurance commission agents, including those who receive commissions from LIC or other insurance companies. Here’s a detailed breakdown:
### **GST Applicability for Insurance Commission Agents**
1. **GST on Commission Income:**
- **Nature of Supply**: The commission received by insurance agents is considered a supply of service under GST.
- **Tax Rate**: The applicable GST rate on insurance commission services is 18%.
2. **Registration Requirements:**
- **Compulsory Registration**: Under Section 24 of the CGST Act, certain categories of persons are required to obtain GST registration regardless of their turnover. These include:
- Persons making taxable supplies (including those who are required to deduct TDS or collect TCS).
- Agents of a supplier.
- Non-resident taxable persons.
- Persons required to pay tax under reverse charge mechanism.
- **Insurance Agents**: As insurance agents receive commission for their services, they fall under the category of “agents” who are required to obtain GST registration under Section 24. Even if the turnover is below the threshold limit for compulsory registration, they must get registered.
3. **Voluntary Registration:**
- While it is compulsory for agents to register under GST, they may also voluntarily register if they wish to claim input tax credit on any inputs or services they have purchased.
### **Steps to Follow for GST Compliance**
1. **Obtain GST Registration:**
- Since insurance commission agents are covered under Section 24, they must obtain GST registration. The registration process involves filing an application through the GST portal, providing necessary documents, and complying with registration requirements.
2. **Issue GST Invoice:**
- Insurance agents should issue GST-compliant invoices for the commission received, showing the GST charged.
3. **File GST Returns:**
- Registered agents need to file GST returns periodically, including GSTR-1 (for outward supplies) and GSTR-3B (for summary of inward and outward supplies, and tax paid).
4. **Maintain Records:**
- Proper records of all transactions, including invoices and receipts, must be maintained for GST compliance and audit purposes.
### **Summary**
- **GST is applicable** to the commission income received by insurance agents.
- **GST registration is compulsory** for insurance commission agents under Section 24 of the CGST Act.
- **Registration** ensures compliance with GST regulations, allows for the issuance of GST-compliant invoices, and enables the claiming of input tax credits if applicable.
For accurate compliance and to address specific concerns, consulting with a GST professional or tax advisor is recommended.
### **GST Applicability for Insurance Commission Agents**
1. **GST on Commission Income:**
- **Nature of Supply**: The commission received by insurance agents is considered a supply of service under GST.
- **Tax Rate**: The applicable GST rate on insurance commission services is 18%.
2. **Registration Requirements:**
- **Compulsory Registration**: Under Section 24 of the CGST Act, certain categories of persons are required to obtain GST registration regardless of their turnover. These include:
- Persons making taxable supplies (including those who are required to deduct TDS or collect TCS).
- Agents of a supplier.
- Non-resident taxable persons.
- Persons required to pay tax under reverse charge mechanism.
- **Insurance Agents**: As insurance agents receive commission for their services, they fall under the category of “agents” who are required to obtain GST registration under Section 24. Even if the turnover is below the threshold limit for compulsory registration, they must get registered.
3. **Voluntary Registration:**
- While it is compulsory for agents to register under GST, they may also voluntarily register if they wish to claim input tax credit on any inputs or services they have purchased.
### **Steps to Follow for GST Compliance**
1. **Obtain GST Registration:**
- Since insurance commission agents are covered under Section 24, they must obtain GST registration. The registration process involves filing an application through the GST portal, providing necessary documents, and complying with registration requirements.
2. **Issue GST Invoice:**
- Insurance agents should issue GST-compliant invoices for the commission received, showing the GST charged.
3. **File GST Returns:**
- Registered agents need to file GST returns periodically, including GSTR-1 (for outward supplies) and GSTR-3B (for summary of inward and outward supplies, and tax paid).
4. **Maintain Records:**
- Proper records of all transactions, including invoices and receipts, must be maintained for GST compliance and audit purposes.
### **Summary**
- **GST is applicable** to the commission income received by insurance agents.
- **GST registration is compulsory** for insurance commission agents under Section 24 of the CGST Act.
- **Registration** ensures compliance with GST regulations, allows for the issuance of GST-compliant invoices, and enables the claiming of input tax credits if applicable.
For accurate compliance and to address specific concerns, consulting with a GST professional or tax advisor is recommended.
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