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Rcm on commission

Rajeev Jagga (Proprietor) (30 Points)

29 October 2017

We are a company in Delhi.

I have to pay commission to a person from Mumbai who helped us sell a machine in Mumbai. This person does not have a GST No. since his total income is less than 20L pa.

Thus I have to levie RCM. Now what kind of GST will be applied, IGST or SGST+CGST?

If IGST is to be applied, then how do I claim ITC?

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8 Replies

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 29 October 2017

First of No threshold limit for Commission business under GST....

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RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 29 October 2017

Registration mandatory for Commission Business under GST...

Rajeev Jagga (Proprietor) (30 Points)
Replied 30 October 2017

Irrelevant answer

Rajeev Jagga (Proprietor) (30 Points)
Replied 30 October 2017

Why is it mandatory? Under service tax also it was not mandatory till 10L
and now under GST it is not mandatory till 20L and thereafter he can always be a composite dealer.

Since his main business is to earn commission on sales, he can ignore ITC and be out of the purview of GST.

My problem is how to declare RCM on payment of commission to unregistered dealer??

What will be the place of supply in this case? If we can declare Delhi as the place of supply then there is no problem but if Mumbai is the place of supply then I have a problem since I will not be allowed to claim ITC of the RCM charged.

And logically, the place of supply should be Mumbai since the end customer is also in Mumbai, dealer is in Mumbai and the final supply of machine is also in Mumbai...

How can we tackle this issue?

Anil Lahoti (88 Points)
Replied 30 October 2017

igst is applicable in your case, & you can take credit (igst)of rcm made by paying igst.
we r taking igst credit on transportation, which is similar situation, interstate purchase of services.