commission paid is RCM applicable under GST

[mandar yadav]

We are Pvt. ltd company & we have Regd. GST no. we have paid commission to Unregistratate person regarding we get business from him & we directly sold our goods to third party now our question is that should we pay GST under RCM for commission paid to Unregistratate person for his giving business to us. if yes or no then please provide notification ,section,rule which is helpful to us when assesment

[Padmanathan KV]

Sir,

No, RCM is not required to be paid on commission paid to unregistered person. There are two provisions which provide for RCM under GST namely, Sec. 9(3) & Sec. 9(4).

Sec 9(3) provides for RCM on notified goods or services. As such, Notification No. 4/2017 CT-R and No. 13/2017 CT-R respectively provides for the goods and services on which RCM is applicable. The service provided by agent to principle for getting customers is not included in the said Notification. (although Insurance agent, recovery agent, Business Facilitator & Business Correspondent etc are included).

Section 9(4) provided for RCM on supply received from unregistered person. However RCM was absolutely exempted with effect from 13-10-2017 vide Notification 8/2017 amended by 13/2017. Later Section 9(4) itself has been amended with effect from 1-2-2019 by CGST ( Amendment) Act, 2018. Currently, Sec 9(4) applies only to Real estate promoters.

[KASTURI SETHI]

Intermediary services are not covered under RCM. I concur with the views of Sh.Padmanathan Kollengode. Nicely explained.

AI Summary

Company Not Liable for GST Under Reverse Charge for Commission Paid to Unregistered Intermediary, Per Sections 9(3) & 9(4) A private limited company inquired whether they need to pay Goods and Services Tax (GST) under the Reverse Charge Mechanism (RCM) for commission paid to an unregistered person who facilitated business for them. The first response clarified that RCM is not applicable in this scenario, referencing Sections 9(3) and 9(4) of the GST Act, and relevant notifications indicating that such services are not included. The second response agreed, noting that intermediary services are not subject to RCM, aligning with the first response's explanation.