1. Can a pure agent recieve a full consideration for a good sold in his own account and then transfer the payment after deducting his commission?
2. can a pure agent pay his principal in advance for say 200 quantities of certain goods and then recieve the amount including his commision from the end user after the goods are sold.
Eg of a business model.
Xyz company authorise dealer of Honda two wheelers Enters into agency contract with abc co. to sell their two wheelers for a commission. Abc co wants an arbitrage gain and hence pays in advance to xyz co for say 200 vehicles and fix their price.
However xyz is still the legal owner of the goods.
Now say abc sells 100 goods to end user in the same month and the remaining in the next
Now since Abc has already paid for the goods to xyZ. It wants to show all the arbitrage gain as commission and pay 18% gst.
Is this the correct way of workinng inder pure agent concept.
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PURE AGENT CONCEPT. QUERY.
Replies (5)
The case you described is clearly falling under Principal-Agent relationship, No pure agent concept is applicable here.
But Under this case does abc co. Falls under trader or agent....since he is receiving money in his own bak accoint and paying advances by using his own capital.
Dear Lucky
Are you Raising Invoice to End customer (quoting your GSTN) .????
Are you Raising Invoice to End customer (quoting your GSTN) .????
No . the principal raises the invoice directly to the customer
Then you do not cover under Agent Defination.
As per Section 2(13) of IGST Act Your Services cover under "Inermediary Services" you arranges or facilitates the supply of Goods or Services between 2 or more person , who does not supplies such goods or services on his own account (Means do not raise his bill)
Hence You require to issue only tax invoice for the commission.
As per Section 2(13) of IGST Act Your Services cover under "Inermediary Services" you arranges or facilitates the supply of Goods or Services between 2 or more person , who does not supplies such goods or services on his own account (Means do not raise his bill)
Hence You require to issue only tax invoice for the commission.
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