IGST ON COMMISSION INCOME

[NILESH PITALE]

Dear Expert

We are Importer and Trading Goods in the Local market, We have to pay Less Amount to the Our Foreign Supplier, We have Accounted Less Amount Under the head Commission Income under balance Sheet, Now Under Department Audit, GST Officer has issued show cause for Leavy IGST Amount on Commission Amount Under Section 13 of IGST Act, (Section 13(8)(B), They are Treating us Intermediary for such Commission . How to tackle , Please Guide

AI Summary

Intermediary status determines tax on commission; place of supply may render commission non-taxable under GST law.
Whether commission recorded by an importer is taxable as intermediary income depends on whether the importer acted as buyer on its own account or as an agent/broker; this is determined by terms of the contract, books of account and documentary evidence. If true trading is demonstrated, amounts are trading margin; if the entity is an intermediary and the place of supply is abroad, the commission may be outside domestic IGST.