Prepared by Adv Vinod Sharwa and FCA B.P. Mundra
Pls visit www.bpmundraca.com
All persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise please ensure to get GST registration and pay GST on every commission. Please note that Turnover criteria of Rs. 20 lacs (Rs. 10 lacs) is not applicable in this case and they have to pay GST even if it below Rs. 20 lacs (Rs. 10 lacs). For Example if agent recd only Rs 1 lacs commission in whole year then he has to pay GST @ 18%.
1. U/s 24 (vii) of the Central Goods and Services Tax Act, 2017 persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise. Hence all Agents/ sub brokers are liable to get themselves registered. (Please see section 24 in point no 6)
2. Section 2(5) of The Central Goods and Services Tax Act, 2017 provides for definition of agent as follows: “agents” means a person including a factor, broker, commission agent, arhatia, del credere agent, or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another.
3. In terms of provisions of Section 2(13) of the IGST Act, 2017 Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account
4. Turnover criteria of Rs. 20 lacs (Rs. 10 lacs) not applicable as sec 24 overrides sec 22. (Please see section 22 in point no 7)
5. Levy and collection on registered dealer. (Please see section 9 in point no. 8)
6. Section 24. Compulsory registration in certain cases
Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––
i. persons making any inter-State taxable supply;
ii. casual taxable persons making taxable supply;
iii. persons who are required to pay tax under reverse charge;
iv. person who are required to pay tax under sub-section (5) of section 9;
v. non-resident taxable persons making taxable supply;
vi. persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
vii. persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
viii. Input Service Distributor, whether or not separately registered under this Act;
ix. persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
x. every electronic commerce operator;
xi. every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
xii. such other person or class of persons as may be notified by the Government on the recommendations of the Council.
7. Section 22. Persons liable for registration
1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.
3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.
4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
Explanation.––For the purposes of this section,––
(i) the expression “aggregate turnover” shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker;
(iii) the expression “special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution.
8. Section 9. Levy and collection
1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.
3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both
4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:
Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:
Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.