Comission income full disclosure in case of Aggregator(like: redbus etc) of bus travelling Business
This query is : Resolved
09 August 2024
let x ltd is the business engaged in bus travelers and their tickets are booked through online platforms y ltd like redbus or Abhibus etc here Ticket price is 1000+5% GST charged to the customer will be received by y ltd. y ltd will deduct their platform commission of 10% which comes to 100+18% gst = 118
here y ltd will collect 1050 and remit 932 to x ltd (1050-118)
from the above case y ltd should disclose its income as 100 +18% gst but if in case y ltd has not disclosed the full amount 100+gst instead, they disclosed 50+gst in their GST returns
In this case, how does govt have a track that the income is leaking here and there is no control ( specifically by notification tds u/s 194h is not applicable in this case )
how can govt track a case like this or what are the possibilities to track this leakage.
here y ltd will collect 1050 and remit 932 to x ltd (1050-118)
from the above case y ltd should disclose its income as 100 +18% gst but if in case y ltd has not disclosed the full amount 100+gst instead, they disclosed 50+gst in their GST returns
In this case, how does govt have a track that the income is leaking here and there is no control ( specifically by notification tds u/s 194h is not applicable in this case )
how can govt track a case like this or what are the possibilities to track this leakage.
13 August 2025
Government Tracking & Controls:
Mismatch in GST Returns:
X Ltd will report ₹1000 + GST as sales in its GSTR-1.
Y Ltd reports only ₹50 + GST as commission income.
This creates a mismatch between supplies declared by X Ltd and inward supplies by Y Ltd.
GST system has a matching mechanism and can flag discrepancies.
Audit & Scrutiny:
The tax authorities can conduct GST audits or assessments.
Cross-verification of bank statements, payment gateways, and contracts can reveal under-reporting.
TDS under GST:
Section 194H (TDS on commission) does not apply to GST payments.
But TDS under GST on commission is generally not applicable here, so no direct TDS mechanism.
Third-party Data & Payment Gateways:
Payment gateways, bank statements, and electronic transaction trails provide data.
The government can track collections vs. remittances.
Invoice Matching & E-way Bills:
E-invoice and e-way bill data further enhance traceability.
If Y Ltd does not declare correct commission, mismatch alerts occur.
Use of Technology & AI:
GSTN and tax authorities use AI and analytics to detect under-reporting.
Frequent mismatch flags a case for scrutiny.
Possible Remedies & Actions:
Compliance drive: The government periodically issues notices and audits for mismatch cases.
Penalty & Interest: Under-reporting commission can attract penalties under GST laws.
Mandatory e-invoicing: For large turnover, mandatory e-invoicing reduces under-reporting.
Contractual Agreement Review: Authorities may seek contracts between X Ltd and Y Ltd to verify commission terms.
Cross-Verification of Bank Transactions: Any large payments/refunds are verifiable.
Summary:
Aspect Impact/Tracking Method
Mismatch in GST Returns Automatic mismatch flags & scrutiny
Lack of TDS applicability No direct TDS tracking on commission
Payment Gateway Data Electronic transaction records analyzed
Audit & Assessment Tax officer can request detailed documents
Penalties Possible for under-reporting and mis-declaration
Conclusion:
While TDS under section 194H is not applicable on GST commission income, government tracking largely relies on GST return reconciliation, electronic payment trails, audits, and technology tools to detect under-reporting or leakage.
Mismatch in GST Returns:
X Ltd will report ₹1000 + GST as sales in its GSTR-1.
Y Ltd reports only ₹50 + GST as commission income.
This creates a mismatch between supplies declared by X Ltd and inward supplies by Y Ltd.
GST system has a matching mechanism and can flag discrepancies.
Audit & Scrutiny:
The tax authorities can conduct GST audits or assessments.
Cross-verification of bank statements, payment gateways, and contracts can reveal under-reporting.
TDS under GST:
Section 194H (TDS on commission) does not apply to GST payments.
But TDS under GST on commission is generally not applicable here, so no direct TDS mechanism.
Third-party Data & Payment Gateways:
Payment gateways, bank statements, and electronic transaction trails provide data.
The government can track collections vs. remittances.
Invoice Matching & E-way Bills:
E-invoice and e-way bill data further enhance traceability.
If Y Ltd does not declare correct commission, mismatch alerts occur.
Use of Technology & AI:
GSTN and tax authorities use AI and analytics to detect under-reporting.
Frequent mismatch flags a case for scrutiny.
Possible Remedies & Actions:
Compliance drive: The government periodically issues notices and audits for mismatch cases.
Penalty & Interest: Under-reporting commission can attract penalties under GST laws.
Mandatory e-invoicing: For large turnover, mandatory e-invoicing reduces under-reporting.
Contractual Agreement Review: Authorities may seek contracts between X Ltd and Y Ltd to verify commission terms.
Cross-Verification of Bank Transactions: Any large payments/refunds are verifiable.
Summary:
Aspect Impact/Tracking Method
Mismatch in GST Returns Automatic mismatch flags & scrutiny
Lack of TDS applicability No direct TDS tracking on commission
Payment Gateway Data Electronic transaction records analyzed
Audit & Assessment Tax officer can request detailed documents
Penalties Possible for under-reporting and mis-declaration
Conclusion:
While TDS under section 194H is not applicable on GST commission income, government tracking largely relies on GST return reconciliation, electronic payment trails, audits, and technology tools to detect under-reporting or leakage.
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