What is the GST rate on a commission agent? I am a broker of trucks. My income is commission received from trucks. Will I need to pay the GST?

Frequently asked questions about the Taxability of the AGENT under CGST Act:

1. Whether commission received from Truck business is covered under the Supply definition?

Answer: Yes, Commission from Truck business is taxable under GST as it is covered under in agent definition. It includes “commission agent”

As per Section 2(5) “agent” means a person, including a factor, broker, commission agent, arhatia,del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another;}

2. When should I get the registration under the GST?

Answer: The commission agent required to get GST registration irrespective of the Turnover under section 24 of the CGST Act 2017.

24. Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be 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;

3. What is the Place of Supply for the Commission Agent?

Answer: As per Section 12 of the IGST act the default rule for the place of supply will be apply.

B2B: Location of the registered person

B2C: Where the address on record exists: Location of the recipient

Other Cases: Location of the supplier of services

4.What is the Value of the supply?

Answer: The Value of supply will be considered as the Transaction Value in the Invoice as per Section 15(1) after including

(a) any taxes, duties, cesses, fees and charges levied under any law

(b) Payments made by the recipient to the 3rd parties on behalf of supplier

(c) Incidental expenses, - any commission etc

(d) Interest or late fee or penalty for delayed payment of commossion .

(e) Subsidies

Further Transaction Value excludes: Discount , which is duly recorded in the invoice.

5.Conditions for availing the Input Tax Credit?

Answer: Some of Eligibility and conditions for taking input tax credit. :

• Input supply of goods or services or both used in the business
• ITC credited to the electronic credit ledger of commossion agent
• Possession of a tax invoice or debit note
• Monthly GST Return Filing.

6. What is the Time limit for the Invoice raising and contents of the invoice?

Answer:

Time Limit : Before or after the provision of service but within a 30 days

Contents of the Invoice : Showing the description, value, tax charged thereon and such other particulars.

7. The list of the Accounts Records to be required maintained and Period of Maintenance?

Answer: As per the Section 35 the Commission Agent required maintain prescribed Books and records for a period of 72 months from such date showing the quantitative details of the goods used and Input Services received and Services supplied

8. What are the due dates for GST Returns :

Answer: The following are the general due dates for various Returns

9. What is the rate at which GST to be collected ?

Answer : The CGST rate is 9% and SGST rate is 9 %. Further if it is interstate Supply ( Supply to another state) then IGST @18% shall be charged instead of CGST and SGST.

FYI : when the commission agent is acting as pure agent . The gst amount shall be charged on the commission amount.

Thanks & Regards

Team Standin Professionals