![]() ![]() ![]() The composition scheme was earlier available only for the suppliers of goods, but the scheme is now available for service providers as well as vide CGST (Rate) notification no. He can register himself as an NRTP (Non-Resident Taxable person) if he is making a taxable supply in India. So, a person is required to obtain compulsory registration once he falls under the definition of an agent as mentioned above. The threshold limit condition for registration does not apply to commission agents. GST Registration for Brokers and Commission AgentsĪny person who falls under the definition of an agent is required to obtain GST registration. Thus, the introduction of GST has increased the tax burden on brokers and commission agents. ![]() Let us understand how a commission agent was charged to tax earlier under the Service tax regime and now under GST with the help of an example.Ĭonsider Mr A a commission agent charges Rs.5,000 as his service charge within India. Here, Mr A is not only providing auctioneering services but also has an authority to transfer the title of goods on behalf of M/s ABC and thus, this transaction is covered under the definition of supply as per Schedule I. In a similar situation, Mr A issues the goods on behalf of M/S ABC to the highest bidder and also raises the invoice in his name (i.e. Thus, Mr A is nowhere involved in the supply of goods, and so he does not fall under the definition of supply as per Schedule I. Here, M/s ABC issues goods to the highest bidder by raising an invoice in the name of the bidder. Mr A identifies a few potential buyers and carries out the auction process. Mr A is an auctioneer appointed by M/s ABC to auction certain goods. Thus, Mr Y is not involved anywhere, and so he does not fall under the definition of an agent as per Schedule I.īut, in a similar situation, if Mr Y obtains the delivery of goods from Mr Z on behalf of Mr X where Mr Z raises the invoice on Mr Y, then such a transaction is covered under the definition of agent and is a supply under Schedule I. Here, Mr Y identifies Mr Z as a supplier and asks him to supply the goods to Mr X by raising an invoice on Mr Y. Mr X appoints Mr Y for purchasing certain goods. Let us understand better with the help of below scenarios. Here, the important point is whether the agent has the authority to pass/receive the title of goods on behalf of the principal. If an invoice is raised in the name of principal – Not covered under Schedule I.If an invoice is raised in his name (agent’s name) – It would be covered under Schedule I transactions and thus liable to GST.‘supplying or receiving the goods on behalf of the principal.’ The key criteria for determining the existence of a principal-agent relationship is ‘how an invoice is raised?’. Thus, a principal-agent relationship is an essential factor for determining whether a transaction is covered under the definition of an agent.įor this, it is essential to understand whether the agent is carrying out the activity as a representative, i.e. The definition of an agent, as discussed above, includes ‘supply or receipt of goods on behalf of the principal’. Applicability of GST for Brokers and Commission AgentsĪs per Section 7 of the CGST Act read with the Schedule I, ‘Supply of goods, by a principal to his agent or by an agent to his principal, where the agent supplies such goods on behalf of the principal’ is chargeable to GST even if made without consideration, but for conducting business. He carries out activities under the principal-agent relationship. An agent includes broker, commission agent, factor, auctioneer, or a mercantile agent. Who is a Broker and Commission Agent Under GST?Īn agent is defined under the GST law as a person who carries on the business of supply of goods or services on behalf of another person (principal). Benefits of invoicing software for small businesses.Documents Required For GST Registration.GSTR-4: Return Filing, Format, Eligibility & Rules.GSTR-1 – Return Filing, Format, Eligibility & Rules.ClearTax GST Software- How to Create All Types of Sales Invoices.GSTR 9C : Reconciliation Statement & Certification- Filing, Format & Rules.Budget 2022 Highlights : PDF Download, Key Takeaways, Important Points.47th GST Council meeting: Latest News, Highlights and Updates.GST on Food and Restaurants – Rules & Rates on Food.Impact of GST on Export of Goods and Services.Works Contract under GST- How Will GST Impact Works Contract?.Sections 206AB and 206CCA of Income Tax: Analysis, Applicability and FAQs.How to pass accounting entries under GST.Which Is Better: Old vs New Tax Regime For Salaried Employees?. ![]()
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