GST on Fish Agents along with Income Tax Provisions

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This discussion clarifies the Goods and Services Tax (GST) and Income Tax implications for agents acting between fishermen and companies. The core issue revolves around how agents should declare their turnover, especially when companies deduct Tax Deducted at Source (TDS) under Section 194Q on the total payment made to the agent, including their commission. It's advised that agents should only declare their commission as income, not the entire amount passed through their account, to avoid crossing GST thresholds unnecessarily. The conversation also touches upon tax audit requirements and how to correctly represent commission-based business income in financial statements.

Hafiz

Hafiz (Querist)
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01 February 2024 Mr. A is an agent between fisherman and the companies/entities. Company/entity will pay entire amount(incl. Mr. A's commission) to Mr.A's Bank account and from that Mr.A will transfer/pay the amount to the fisherman. Mr.A will declare his turnover/income to the extent of commission received.
After introducing Sec 194Q, now the companies started deducting TDS on payments to Mr.A. Whether Mr.A should show the entire amount received from company/entity as turnover?
If Mr.A is showing the entire amount as turnover then he will cross the GST limit of Rs. 20 lakhs. If so, at what percentage GST will applicable to him?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 February 2024 Show entire amount as turnover GST not applicable on sale of fish. Show payment to fisherman as purchase of fish.

Hafiz

Hafiz (Querist)
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05 February 2024 Sir
Thanks for your reply.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 February 2024 You are welcome..
...

Hafiz

Hafiz (Querist)
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30 September 2024 Adding to the same one. If the Mr.A falls under the tax audit purview, then under which business code this to be shown and what description is to be given?
For himself earlier and now commission based income only getting.
So can we show business as service after showing sales and purchase in P&L?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 October 2024 Show business as service commission agent.
Show only commission income in p and l and not to show sale and purchase.

Hafiz

Hafiz (Querist)
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01 October 2024 Since TDS deducted under 194Q by the companies turnover under AIS/TIS shows Rs 2 cr. So when we declare income on commission basis, will there be a chance of receiving notice from IT dept? Commission income will be closely to 3% of total receipts.

With turnover of Rs 2 cr in AIS and we are declaring commission income of Rs 6 lakhs (approx) and not conducting tax audit will the chance of notices/queries from IT dept is higher?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 October 2024 Declare turnover as per AIS tax audit applicable in view of lower profit declared.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 October 2024 Declare turnover as per AIS tax audit applicable in view of lower profit declared.

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