Agent and principal relationship under gst law

581 views 4 replies

Abhay Kumar Sethia

Liaison Expert

300 Points Joined August 2008

My company is selling goods on credit basis (to more than 10 persons)with the condition that immediately after the collection of the sale proceeds he will remitted/deposited the cash at the cash counter of the company on the same day or on the next day. Actually we are raising the TAX INVOICE ON HIS OWN NAME (total invoice value in from July 2017 is Rs. 5197272 for one person) and he is after the sales collection deposited the same on the sales or cash counter i.e. THE FULL INVOICE AMOUNT. We are also reimbursing the actual exp. in the course of affecting the sales.

Now my question on the matter is as follows.

Is this activity by the company and the selling person are covered under the agent and principal relationship?
If the transaction is covered under GST then please tell me who will raised the invoice for commission i.e. the company or the agent CHARING THE GST and at what rate.
If the selling person is an unregistered person then the same will covered in RCM under GST or not?
And with this fact that I am providing the selling exp. And also deducting TDS u/s 194c will THIS affect my accounting under GST law?
My VERY IMPORTANT QUESTION IS that is this transaction attracting the provisions of the GST law from any angle or not? THEN PLEASE ELABRATE.

Replies (4)

Pankaj Rawat

GST Practitioner

55067 Points Joined June 2017

1. yes it's covered under Defination of
agent

2. yes it covered under the GST, & agent will be raising u a bill for his service & expenses reimburse, at 18%

3. yes If the agent is unregistered then RCM has to be done on his service ( RCM on goods has been deferred to 30/6/18 but on service RCM is applicable)

4. yes , it's Ur liabilities to deduct the TDS on agent bill under 94(H)

Note:
Yes , if u are taking bills for expenses in Ur own name , reimburse to agent in that case TDS liability will not be arise (only on that Part of amount,... Moreover if the agent does not keep his marign on such expense then he cannot charge gst on same It's just reimbursement,)

GST he will charge on his services, , TDs will be deducted only on the commission)

5. yes , plz refer, section 2(5) Cgst act section 7 Cgst act, section 15 Cgst act