GST Liability by Sub-broker who is also registered under GST for other Goods & Services

This query is : Resolved

Pradip Gohil (Querist)
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05 March 2024 Sir, I am trader as well as service provider registered under GST & recently become sub-broker for dealing in Share market / opening Demat / Mutual fund etc & earned brokerage from that activity.

please guide as asked by Principal - Issuing GST tax invoice - where to mentioned in GSTR-1

Further, I have credit/cash balance in GST ledger but principal asked copy of Challan for payment of the same.

Guide with procedural aspect too.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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07 July 2024 As a sub-broker in the share market, you are providing services and earning brokerage income, which is subject to GST. Here's how you can handle invoicing and compliance:

### Issuing GST Tax Invoice:

When you provide brokerage services and earn income from brokerage, you need to issue a GST tax invoice to your principal (the entity for whom you are acting as a sub-broker). Here’s what you should include in the GST tax invoice:

1. **Invoice Details:**
- Invoice number and date.
- Your GSTIN and the GSTIN of your principal (if applicable).
- Name and address of both parties.
- Description of services provided (brokerage services).
- Amount of brokerage charged.
- GST rate and amount charged (if applicable).
- Total invoice value.

2. **Place in GSTR-1:**
- In your GSTR-1 return, you should report all outward supplies, including the brokerage income. This should be reported in Table 6 (Taxable outward supplies made to registered persons) of GSTR-1.

### Procedural Aspects for Payment and Documentation:

1. **Challan for GST Payment:**
- If you have a credit balance in your GST ledger, you can utilize it against your GST liability for the brokerage income.
- Generate a GST Challan (GST PMT-06) through the GST portal to make payment. You can select the appropriate amount from your credit ledger to pay your GST liability.
- After making the payment, you can download the Challan and provide a copy to your principal as proof of payment.

2. **Compliance and Record-Keeping:**
- Maintain proper records of all invoices issued, GST payments made, and returns filed.
- Keep copies of GST Challans and other relevant documents related to your brokerage activities.

### Example of GST Tax Invoice:

```plaintext
Invoice Number: [Invoice No]
Date: [Date]

Seller Details:
[Your Company Name]
[Your Address]
GSTIN: [Your GSTIN]

Buyer Details:
[Principal's Name]
[Principal's Address]
GSTIN: [Principal's GSTIN]

Description of Service: Brokerage Services in Share Market
Amount: [Total Amount of Brokerage]

GST (18%): [GST Amount]

Total Invoice Value: [Total Invoice Amount]

Terms and Conditions:
[Your Terms and Conditions]

Signature
[Your Signature]
```

### Summary:

- Issue GST tax invoices for the brokerage income you earn from your principal.
- Report this income in Table 6 (Taxable outward supplies made to registered persons) of GSTR-1.
- Use your GST ledger balance to pay GST liabilities via GST Challan (PMT-06) and provide a copy of the Challan to your principal as requested.

By following these steps, you can ensure compliance with GST regulations while managing your brokerage income as a sub-broker in the share market. If you need further assistance, consider consulting with a tax professional or GST advisor for personalized guidance.

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