Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Principal agent

Shivani (Learner) (1881 Points)

14 July 2018

dear friends

if X is registered in Delhi and he has an agent Y in Delhi to whom he sends goods so that agent can sell it on his behalf.

then will this qualify as supply? wil gst apply?

if yes on what value as basically X is not selling goods to his agent Y but only sending it to them.

will agent also require to get himself registered?

regards

shivani

Reply
Follow
Share

7 Replies

prasad Nilugal (3914 Points)
Replied 14 July 2018

As per section 7 sub section C schedule I (3) of the CGST act 2017 ,goods sent by principal to agent without consideration will. be treated as Supply , Gst applicable .
If agent make taxable supply goods ,as per section 24 sub section (vii) of the CGST act 2017 registration is required .

Upgrade to CAclubindia Pro. Subscribe Now!

Shivani (Learner) (1881 Points)
Replied 14 July 2018

Dear Prasad

thanks

my question to u is that in my example agent is selling goods on principal behalf,

So who will issue invoice to the buyer ?

will it be considered as agent's outward supplyor principal outward supply?

how will billing take place?

regards

shivani

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 15 July 2018

Shivani (Learner) (1881 Points)
Replied 15 July 2018

Dear Pankaj

your reply is not showing up

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 15 July 2018

THERE ARE TWO TO WAYS SELL THROUGH AGENT :

1. BILL IS RAISE BY SUPPLIER TO HIS CLIENT, AGENT TAKES THE COMMSSION FROM SUPPLIER FOR MANAGING SUPPLIES

2. BILL IS RAISE BY SUPPLIER TO AGENT & AGENT FURTHER ISSUE HIS BILL TO CLIENT

AS TO ABOVE SAID CONDITION LETS TAKE 1ST CONDITION: ACCORDING TO SECTION 2(13) OF IGST ACT , INTERMEDIARY IS AN AGENTWHO ARRNAGES OR SUPPLY GOODS & SERIVES BETWEEN TWO OR MORE PERSONS, BUT INTERMEDIARY SHOULD'NT SUPPLY GOODS OR SERVICES ON HIS OWN ACCOUNT. SO IN THIS CASE AGENT HAS TO BE REGISTERED ONLY IF HIS TURNOVER (COMMSSION) EXCEEED 20 LAC

AS PER 2ND CONDITION : AS PER SECTION 2(5) CGST ACT "AGENTS" MEANS A PERSON INCLUDING A FACTOR , BROKER, COMMISSION AGENT DEL CREDERE AGENT OR AUCTIONER OR ANY OTHER MERCANTILE AGENT , WHO CARRIES ON THE BUSINESS OF SUPPLY OR RECEIPT OF GOODS OR SERVICES OR BOTH ON BEHALF OF OTHER. SO SUCH AGENT AS PER SECTION 24(VII) CGST ACT IS COMPULSORY TO TAKE REGISTRATION

SO AS TO YOUR QUERY IF AGENT "Y" FALLS UNDER 1ST CONDITON THEN MATERIAL SEND BY X TO Y IS NOT SUPPLY & AS PER CONDITION 2ND, MR "X" THE PRINCIPAL WILL RAISE BILL TO HIS AGENT "Y", WILL BE TREATED AS SUPPLY

Upgrade to CAclubindia Pro. Subscribe Now!

prasad Nilugal (3914 Points)
Replied 15 July 2018

Mr rawat who will file return Gstr3b , Gstr 1 , etc , principal or register agent? .

Pankaj Rawat (GST Practitioner) (55047 Points)
Replied 15 July 2018

Dear Prasad
As per condition 1 If the Agent is taking only commission , then Offcourse it means the Bill is being raise by Principal to client directly , so in this condition the principal will file his GSTr 1 , 3b

As per condition 2nd : principal raisng Bill to Agent & Agent further raising bill to client so in this case both Agent & principal will file GSTR 1 & 3b