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This discussion clarifies GST implications for commission agents selling land. Even if turnover is below £20 lakh, agents facilitating land sales are generally liable for compulsory GST registration as it's considered a service. Regarding turnover, while the full amount might pass through the agent's account, typically only the commission earned is subject to GST, though specific circumstances and tax authority interpretation can influence this.

Chartered Accountant

Chartered Accountant (Querist)

17 April 2025 Q.1 A commission agent dealing in the sale of land, being immovable property and providing services to UNREGISTERED PERSON, is he liable for taking compulsory registration even if turnover is below 20 Lakhs?
This question arises in terms of the definition of " Agent" under Section 2[5], under Section 7 and Entry No. 5 of the Schedule III, who is supposed to deal only in goods or services. Land, not being goods, is it sustainable to demand GST on such commission? Please clarify.

Q.2 Can commission agent of land take the full value of consideration firstly in his account, then deduct his commission & then further transfer the balance amount to original owner of land, what will be treated as turnover of the agent then?

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

18 April 2025 GST registration is generally required for commission agents irrespective of turnover limits. While land is classified as immovable property and not goods, the commission earned by an agent for facilitating its sale is considered a service and is subject to GST.
The definition of "agent" under Section 2(5) of the CGST Act includes commission agents who supply services on behalf of another person, making them liable for GST registration even if their turnover is below ₹20 lakh.
For your second question, if a commission agent first receives the full value of consideration in their account, deducts their commission, and then transfers the balance to the original owner, the entire amount may be considered their turnover. However, tax authorities typically treat only the commission portion as taxable turnover for GST purposes. The accounting treatment and tax implications depend on whether the agent is acting as an intermediary or principal in the transaction.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

28 September 2025 Good luck.....

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