GST ON INSURANCE AND BANKING COMMISSION RECD BY PROPRIETOR

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This discussion clarifies the Goods and Services Tax (GST) implications for proprietors receiving commissions from banks and insurance companies. It explains that both types of commissions generally fall under the Reverse Charge Mechanism (RCM) as per Section 9(3) of the CGST Act. This means the recipient of the service (the bank or insurance company) is responsible for paying the GST, not the proprietor receiving the commission. The advice covers how to record these transactions for GST returns (GSTR 1 and GSTR 3B) and whether separate bills need to be issued.

CA Snehal Pratik Doshi

CA Snehal Pratik Doshi (Querist)

10 January 2020 One of my client has taken registration under GST,he is receiving two commissions,one from banks for loans and other services and another is insurance commission,so i wanted to know the gst applicability on both the incomes and how to charge and pay the gst and whether there is any reverse charge applicable or not.he is required to prepare the bill and send to the banks and parties or not.which record is to be maintained for gst return filing both GSTR 1 and GSTR 3B.

Thanks
SNEHAL

CA Anita Bhadra

CA Anita Bhadra (Expert)

10 January 2020 Insurance Agent & Banking recovery Agents - Both the services fall under RCM - Section 9(3) of CGST Act .
Recipient( Banking sector & Insurance company ) will make the bill and pay GST on it.

CA Snehal Pratik Doshi

CA Snehal Pratik Doshi (Querist)

10 January 2020 So for the person receiving the commission how it is to be shown under gst return and in books?

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