GST on Commission

[RameshBabu Kari]

Dear Experts,

If registered person who is part of state govt, doing Commission business for the facilitation of trading of goods between two parties those parties might be registered or not. In such cases, trading of goods are in some cases fully exempt or fully taxable or partially exempt and partially taxable. How GST will applicable on trading of exempted goods or nil rated goods ? Is there any difference on commission on trading of exempt goods or taxable goods ? What are the GST applicability for the govt entity in this scenario ?

[Rajagopalan Ranganathan]

Sir,

Commission business for the facilitation of trading of goods between two parties will be treated as Service provided by 'Intermediary' as per Section 2 (13) of IGST Act, 2017. Taxability of intermediary service will not depend upon whether the goods dealt with are exempted or nil rated. Therefore the commission earned for the service is liable to GST.

However, intermediary services to business facilitator or a business correspondent with respect services will fall under heading No. 9971 or 9985 and the same is exempted/tax free/non-taxable services under GST vide Sl. No. 39 of Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017.

[Kishan Barai]

Please clarify the following points.

1. Do you provide help in finding local parties who can buy from your Supplier & take commission ??

2. Is your turn over above 20,00,000 ??

3. Do you buy from your Supplier & sell with your bill ??

Please explain the above points with Product details to get better help .

[KASTURI SETHI]

For additional information---- commission agent' s service for sale and purchase of agricultural produce are exempted from GST. SAC 9986.

AI Summary

Intermediary services: commission for facilitating goods transactions is generally subject to GST, with limited exemptions. Commission for facilitating trading of goods is treated as a service by an Intermediary under Section 2(13) of the IGST Act, and its taxability does not depend on whether the traded goods are exempt, nil rated or taxable; ordinarily such commission is liable to GST. Exceptions include business facilitator/business correspondent services and commission agent services for agricultural produce, which are notified as non taxable or exempt.