TaxTMI 
TaxTMI 
GST department has issued notice to our clients stating that "commission paid" should be treated as "agency commission", and not to be treated as "Salary or wages" as pigmy agent operates on behalf of the Bank for limited purpose of deposit collection, without being entitled to any employment benefits such as salary, PF, Gratuity etc. The agents remuneration is purely in the nature of commission, directly linked to the amount of deposit mobilised. In support of this, department relying on Notification no 13/2017-Central Tax (Rate) and Notification no 29/2018 -Central Tax (rate) dated 31.12.2018. Is the action of the department tenable in law? Your views please
GST Law -Commission paid to Pigmy Agents by Credit Co-operative Society/Bank taxable under RCM?
11 Dec 2025 
10 Replies 
2496 Views Asked by
Commission to pigmy agents taxable under reverse charge if they act as business facilitators rather than employees.
Commission paid to pigmy agents is taxable under the reverse charge if agents function without employment benefits and act as business facilitators/business correspondents or intermediaries for deposit mobilisation or recovery; exemptions for BF/BC in rural branches may apply, and a documented employer-employee relationship is the principal defence against such taxation. (AI Summary)
Commission paid to pigmy agents is taxable under the reverse charge if agents function without employment benefits and act as business facilitators/business correspondents or intermediaries for deposit mobilisation or recovery; exemptions for BF/BC in rural branches may apply, and a documented employer-employee relationship is the principal defence against such taxation. (AI Summary)