E - Invoicing and Agreegate Turnover

[Kaustubh Karandikar]

From 01.10.2022, if the aggregate turnover is more than Rs.10 Crores, E – Invoicing is compulsory. In case of Custom House Agents, they pay Customs duty on behalf of their client and recover the same subsequently at actuals but not charging GST on the same. While calculating Rs.10 Crore turnover, whether the value of such customs duty recovered from client is required to be considered?

[Rajagopalan Ranganathan]

Sir,

According to Section 15 (2) (a) of CGST Act, 2017

The value of supply shall include–––

(a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier. Any tax collected except CGST, SGST or UTGST is to be included in the value of supply.

However, in my opinion, the customs duty recovered by the Customs Broker (Agent) is not towards providing customs broker service. It is independent of the service provided/supplied. Hence customs duty collected by customs broker from their client need not be included for calculating Rs.10 Crore turnover,

[Shilpi Jain]

This customs duty will be a pure agent reimbursement.. not required to be added

[Ganeshan Kalyani]

The same is not a consideration, hence it is not to be considered in the turnover.

AI Summary

Aggregate turnover exclusion: customs duty recovered as pure agent reimbursement is not treated as turnover for e invoicing threshold. Customs duty recovered by a customs broker as an independent reimbursement and not charged as consideration for the broker's service is characterised as a pure agent reimbursement and should be excluded from the broker's aggregate turnover for determining e invoicing applicability.