Treshold of 20 lakhs on intermediary services
This query is : Resolved
13 April 2017
Currently those doing commission business on sale of goods below Rs.10.00 lakhs per annum are exempt from Service Tax and not taxed under State VAT or CST laws. With GST is the exemption decided of Rs.20.00 lakhs applicable on this business? If turnover is less than Rs.10 lakhs in the state where assessee is located ut a fraction of the turnover (approx 2 lakhs) is commission received from a company located outside the state, does registration and payment of GST still have to be done due to Interstate supply of commission service as intermediary for sale of goods?
There does not seem to be clarity on Place of Provision Rules. If a person say in Gujarat bills for commission to client in Punjab as intermediary for selling clients goods in Gujarat, does he have to collect IGST or SGST.
There does not seem to be clarity on Place of Provision Rules. If a person say in Gujarat bills for commission to client in Punjab as intermediary for selling clients goods in Gujarat, does he have to collect IGST or SGST.
13 April 2017
Commission agents who are engaged in supply of goods shall be treated as supplier of goods. In that case threshold limit shall be calculated based on value of goods supplied. Only those commission agents shall be treated as service providers who pass on orders to the principal and principal supplies directly to the third parties.
The era of consignment agent, appointed for the purposes of saving CST appears to be over.
The era of consignment agent, appointed for the purposes of saving CST appears to be over.
13 April 2017
Apparently the person who supplies good on behalf of another is handling the goods and accordingly gets taxed. However the one who just books an order for an over riding fee or commission and is not involved in receiving the goods inadvertently gets to tax net even if his turnover is say 5 lakhs out of which he may charge 50000 to a person out of state.
In this respect a person doing accountancy or book keeping say in Gurgaon and gets professional remuneration of 10 lakhs a year will still come in tax net if out of this he has given service worth 3 lakhs in Delhi.
In this respect a person doing accountancy or book keeping say in Gurgaon and gets professional remuneration of 10 lakhs a year will still come in tax net if out of this he has given service worth 3 lakhs in Delhi.
14 April 2017
1. Currently those doing commission business on sale of goods below Rs.10.00 lakhs per annum are exempt from Service Tax and not taxed under State VAT or CST laws. With GST is the exemption decided of Rs.20.00 lakhs applicable on this business?
-- Yes.
2. If turnover is less than Rs.10 lakhs in the state where assessee is located ut a fraction of the turnover (approx 2 lakhs) is commission received from a company located outside the state, does registration and payment of GST still have to be done due to Interstate supply of commission service as intermediary for sale of goods?
-- Presently exemption notification for Small supplier is not there in public domain, hence it is difficult to answer the question with certainty. But it appears that if a supplier is engaged in inter-state supply, he has to get registered in pay taxes irrespective of threshold limit. The above view comes from Section 24(i) which makes is mandatory for every person making interstate supply to get registered irrespective of threshold limit.
There does not seem to be clarity on Place of Provision Rules. If a person say in Gujarat bills for commission to client in Punjab as intermediary for selling clients goods in Gujarat, does he have to collect IGST or SGST.
-- Now a days business transactions have become extremely complicated. In such scenario defining a place of service is a real difficult task. Despite all limitations, Indian legislatures has given an extremely good and clear definition of place of service. Off course certain doubts shall be there, and some dispute would arise but the definition as a whole is very clear. Further there is a provision that any dispute related to place of service shall go to National Tribunal only. Further there are provisions that if IGST is paid instead or SGST/CGST, there shall be no interest penalty etc. Government is doing whatever is possible but off course perfection is never possible.
Coming back to your question regarding place of service, if the intermediary service is service (not amounting to deemed supply of goods),location of recipient shall be place of service irrespective of the fact where service is provided or goods are sold.
-- Yes.
2. If turnover is less than Rs.10 lakhs in the state where assessee is located ut a fraction of the turnover (approx 2 lakhs) is commission received from a company located outside the state, does registration and payment of GST still have to be done due to Interstate supply of commission service as intermediary for sale of goods?
-- Presently exemption notification for Small supplier is not there in public domain, hence it is difficult to answer the question with certainty. But it appears that if a supplier is engaged in inter-state supply, he has to get registered in pay taxes irrespective of threshold limit. The above view comes from Section 24(i) which makes is mandatory for every person making interstate supply to get registered irrespective of threshold limit.
There does not seem to be clarity on Place of Provision Rules. If a person say in Gujarat bills for commission to client in Punjab as intermediary for selling clients goods in Gujarat, does he have to collect IGST or SGST.
-- Now a days business transactions have become extremely complicated. In such scenario defining a place of service is a real difficult task. Despite all limitations, Indian legislatures has given an extremely good and clear definition of place of service. Off course certain doubts shall be there, and some dispute would arise but the definition as a whole is very clear. Further there is a provision that any dispute related to place of service shall go to National Tribunal only. Further there are provisions that if IGST is paid instead or SGST/CGST, there shall be no interest penalty etc. Government is doing whatever is possible but off course perfection is never possible.
Coming back to your question regarding place of service, if the intermediary service is service (not amounting to deemed supply of goods),location of recipient shall be place of service irrespective of the fact where service is provided or goods are sold.
14 April 2017
Thanks for your inputs. Yes, I have gone through this pot boiler thriller of CGST Bill passed and I will soon go through IGST and SGST too. Apparently there is no respite for commission agent and they have widened the definition of C&F (Consignment) Agent to include the commission agents and brokers.
If one offers a professional / managerial service there are two overlapping provisions apparently. If I am a management consultant to a party in a state other than where I am having my POB, logically I should be collecting IGST. However there is another provision of casual taxable person to take temporary registration for 90 days against advance payment on estimated basis in the state where I am providing the service. This is extendable for another max 90 days and annual return is not to be filed. However one has to file in home state the annual returns. Is this a conflicting provision or double taxation (charge IGST in home state and SGST as casual taxable person in the other state? No matter how much they try, it is difficult to come with a simple law.
If one offers a professional / managerial service there are two overlapping provisions apparently. If I am a management consultant to a party in a state other than where I am having my POB, logically I should be collecting IGST. However there is another provision of casual taxable person to take temporary registration for 90 days against advance payment on estimated basis in the state where I am providing the service. This is extendable for another max 90 days and annual return is not to be filed. However one has to file in home state the annual returns. Is this a conflicting provision or double taxation (charge IGST in home state and SGST as casual taxable person in the other state? No matter how much they try, it is difficult to come with a simple law.
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