GST on Payments made to Collection Agent

[sumanta nayak]

Is RCM applicable to Payments made to daily collection agents of Banks?

[Rajagopalan Ranganathan]

Sir,

According to sl. No. 8 of Notification No. 13/2017-C.T. (Rate) dated 28.06.2017 as amended in respect of services supplied by a recovery agent to a banking company or a financial institution or a non-banking financial company, gst is payable under RCM by a banking company or a financial institution or a non-banking financial company, located in the taxable territory.

[Ganeshan Kalyani]

Services supplied by a recovery agent to a banking company or a financial institution or a non-banking financial company: A banking company or a financial institution or a non-banking financial company, located in the taxable territory receiving service from a recovery agent shall pay tax under reverse charge.

[sumanta nayak]

Is RCM aplicable to daily deposit collection agents ?

[YAGAY andSUN]

In our view, yes GST is payable on Daily Collection under Reverse charge Mechanism.

[sumanta nayak]

If RCM is payable then under which clause of the notification?

[KASTURI SETHI]

Dear Querist,

I think that you are not talking about Recovery Agent. The activities of recovery agent and collection agent are entirely different. The nature of collection agent can be likened to intermediary service/ commission agent. Pl. elaborate your query.

AI Summary

GST Applicability on Payments to Daily Collection Agents Under RCM Discussed; Reference to Notification No. 13/2017-C.T. (Rate) Made A discussion on the applicability of the Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) for payments made to daily collection agents of banks. Participants referenced Notification No. 13/2017-C.T. (Rate), indicating that services provided by recovery agents to banking or financial institutions are subject to GST under RCM. Clarification was sought on whether this applies to daily deposit collection agents, with opinions suggesting GST is payable under RCM, though distinctions were made between recovery and collection agents, suggesting the latter may be considered intermediary services. Further elaboration was requested for clarity.