Commission Income and GST Reimbursement Process with Company

Commission Income and GST Reimbursement Process with Company


In this scenario, the distributor receives a commission of Rs 100 from the company, and the company bills the distributor Rs 100 in GST with Input Tax Credit (ITC). Additionally, Rs 100 income under section 194H is reflected in the distributor's 26AS statement. Consequently, when the distributor invoices the company, the company is to pay a GST reimbursement of Rs 18.

Q1- Could you please clarify whether the distributor needs to pay this GST amount in cash or if it can be offset against the Input Tax Credit (ITC) available?

Q2- Itc is eligible for Claim or not.

Q3. Do we have to discharge the liability two times.