Scope of principal and agent relationship under Schedule I of CGST Act, 2017 in the context of del-credere agent - Reg.

Del-credere agent treatment determines whether interest on DCA-provided credit is included in the value of goods supplied.

The circular clarifies that invoice issuance determines whether a del-credere agent qualifies as an agent under Para 3 of Schedule I: if the supplier issues the invoice (even through the DCA) the DCA is not an agent; if the DCA issues the invoice in his own name the DCA is an agent. If the DCA is not an agent, short-term credit provided by the DCA is an independent supply and interest is not included in the supplier's value; if the DCA is an agent, the credit is subsumed into the goods supply and interest must be included in the value of supply.