GST - COMMISSION INCOME

[NAREN KHATRI]

Registered Under GST.. and regularly filed return etc.. now received commission from unregistered person from selling their goods directly.. having only commission note.. now what is treatment under GST.. Whether any GST liability arise or not..or.. any other else..??

[KASTURI SETHI]

GST is payable if you have crossed threshold exemption limit of ₹ 20 lakhs/10 lakhs.

[Alkesh Jani]

Sir, my point of view is that as you are registered with GST and filing the return than you are liable for payment of tax under GST. However, all categories of registered persons are exempted from the provisions of reverse charge under 9(4) of CGST / SGST(UTGST) Act, 2017 / section 5(4) of IGST Act, 2017, till 31.03.2018. This exemption is available only till 31.03.2018, vide notification no.38/2017-Central Tax (Rate) dated 13.10.2017,

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views on Shri Jain. The GST Council in its 26th meeting decided to extend the exemption from RCM payment till 30.06.2018. The notification in this regard is yet to be published.

[Ganeshan Kalyani]

notification effecting 3 months extension is not yet published .

[KASTURI SETHI]

Dear Querist,

You have sold the goods (belonging to unregistered person) to some other persons(Third party/parties) directly (i.e. without bringing the same into your premises and without accounting for in your account) and got commission from unregistered person. You supplied the goods directly to third party/parties.

Is it correct ? Will you please elaborate your query further ?

[Ganeshan Kalyani]

dear khatri sir, do you mean to say that you are a clearing and forwarding agent. your principal supplylies goods and you are supplying it under the instruction of your principal and you get commission for that. is this arrangement correct ?

[NAREN KHATRI]

Yes Kasturi Sir ji..

The goods direct delivery to party.. we just received only commission note towards mutual discussion with party's.. as under GST every registered should consider their income in GST.. how ever in this case we should do nothing (not sale nor purchase) but only received commission note..

[KASTURI SETHI]

If it is so, it is taxable. I stick to my reply already cited above. Section 9(4) is not applicable here. Commission is not Exempted. It is your consideration and GST is leviable. Under Section 9(4), deferred till 30.6.18, registered receiver receives the goods from unregistered dealer supplier and pays tax . You recieved only commission.You did not receive/purchase the goods from unregistered dealer. How Section 9(4) is applicable to you ? Had you purchased the goods from unregistered person and accounted for the whole amount of purchased goods in your books of accounts, then Section 9(4) would have been applicable to you. You have not purchased the goods. It is a fact. You have played the role of a commission agent. Hence taxable.

AI Summary

Commission income taxable under GST by agent as supply; reverse-charge provisions inapplicable where no purchase occurred.
Commission received by a registered person for facilitating direct sales by an unregistered principal is taxable as consideration for the agent's services; reverse-charge exemptions applicable to purchases from unregistered suppliers do not apply where the registrant only receives commission and has not purchased the goods.