In the scenario you’ve described, where a distributor appoints a dealer in a village, and the dealer collects payment from the buyer without issuing a bill, but the bill is generated in the name of the end customer, the dealer’s GST transactions need to be recorded accurately to comply with GST regulations.
Here’s how the dealer can show their sales in GST:
Billing Process: The dealer should issue a tax invoice to the end customer at the time of sale, which includes the dealer’s GSTIN, the customer’s details (if the customer is registered under GST), and other mandatory fields such as HSN code, descripttion of goods, quantity, taxable value, and GST rate1.
Commission or Margin: If the dealer operates on a commission or margin basis, this amount should be clearly mentioned in the invoice, and GST should be applied to the commission earned by the dealer.
GST Returns: The dealer must file regular GST returns, detailing all the transactions, including sales, commissions earned, and input tax credits claimed. The specific returns and their frequency will depend on whether the dealer is registered as a regular taxpayer or under the GST Composition Scheme23.
Bank Transactions: The payment transactions between the distributor, dealer, and the buyer should be properly recorded. The dealer’s bank statements should reflect the payments received from the buyer and the payments made to the distributor.
Record Keeping: It’s crucial for the dealer to maintain accurate records of all transactions, including invoices, receipts, and bank statements, to support the entries made in the GST returns.
Composition Scheme: If the dealer’s turnover is below the threshold limit, they may opt for the GST Composition Scheme, which allows them to pay GST at a fixed rate on turnover without the need to charge GST to the buyer2. However, they cannot claim input tax credit under this scheme.
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