GST on Commission Agent and Brokers

GST on Commission Agent and Brokers

According to GST Act The word agent has been defined under sub- section( 5 ) of section 2 of the GST Act as follows ” agent”  mean a person including a factor, broker, commission, agent, arhatia, del credere agent, an auctioneer or any other mercantile agent by what ever name called who carries on the business of supply or receipt of goods or services or both on behalf of another.

In other word an “Agent” may defined” a person who acts on behalf of another person or group


The following two key elements emerge from the above definition of agent

1.the term agent is defined in term of the various activities being carries out by the person concerned in the principal agent relations and

2.the supply or receipt of goods or service has to be undertaken by the agent on behalf of the principal.

A Commission Agent is required to obtain Compulsory Registration u/s 24 (vii) of GST Act irrespective of its turnover. Thus the threshold limit of Rs. 20 lakh as enunciated in section 22(1) of GST Act does not apply to an agent.

Compulsory registration in certain cases

‘Notwithstanding anything contain in sub section(1) of section 22 the following categories of person shall be required to be registered under this Act,

1.Commission agent

2 persons who make taxable supply of goods or services or both of other taxable persons whether as an agent or otherwise.

The value of taxable supply rendered by an agent shall include the amount of consideration commission being receive by the agent for the value of goods/ service provided by the agent to his principle it shall not include the amount of reimbursement claimed by the agent from the principle.


Leave a Reply

Your email address will not be published. Required fields are marked *