Kind Attention: Experts only
My unregistered client intends to provide the following service:
Services provided by a Commission Agent (located in the Taxable Territory) to the Principal-Seller (located in Non-Taxable Territory/Abroad) in respect of procurement of order/s from the Customers located in the Taxable Territory on behalf of the foreign supplier of goods.
Location of Supplier (my client) is Delhi
Location of Recipient is UK (address is known)
Place of Supply: Delhi i.e. location of Supplier as per Sec 13 (1) and Sec 13 (8) (b) IGST Act , i.e.
The place of supply of the following services shall be the location of the supplier of services, namely:–– (b) Intermediary services
Type of Supply: Intra State Supply, as per Sec 8 (2) IGST Act, since location of Supplier and place of supply of Service are in same state.
Taxable Supply: Yes, as per Sec 2(108) CGST Act
Supplier is neither a Casual Taxable Person as per Sec 2 (20) CGST act nor a Non-Resident Taxable Person as per Sec 2 (77) CGST Act, as he is resident of India with a permanent place of business at Delhi.
Question: Does my client need to mandatorily register under GST?
Taxable Person defined u/Sec 2(107) of CGST act as follows:
“taxable person” means a person who is registered or liable to be registered under section 22 or section 24;
My Client's aggregate turnover will be under 20Lakhs in the financial year so they need not register per Sec 22 (1) CGST act.
Sec 24. CGST act states
" Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) person who are required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
(x) every electronic commerce operator;
(xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council. "
My client appears at best to fit in Sec 24 (vii) of CGST Act. However, crucially, the person on whose behalf my client provides the service (i.e. Principal Seller- located in Non Taxable Territory) is not a Taxable Person.
Hence in my view, my client also escapes mandatory registration under Sec 24 (vii) and can avoid registration till his turnover crosses 20 Lakhs.
CAclubindia
