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Applicability of GST on Transport Commission Agents

Rules 1227 views 1 replies

Vivek Jain

Practice

26 Points Posted on 02 October 2024

I have a query regarding Transportation Services.

A GTA (Say A) takes a vehicle from a Broker (Say B), who in turn takes the vehicle from Truck Owner (Say C) to supply the same vehicle to consignor/consignee. 'A' issues the consignment note in this transaction. 'B' is just an intermediary/middle man. 'B' charges 'A' say Rs. 23000/- and pays 'C' Rs. 20000/-. That is the commission earned by 'B' is Rs. 3000/-. As per my understanding the Broker 'B' is liable to charge GST as an intermediary. Pls clarify the following query :-

1. Is there any way out to keep the Broker B out of the GST ambit ?

Replies (1)

Quick Summary

A transport broker acting as an intermediary between GTA and truck owner is liable to GST on commission earned. Even if acting only as a middleman, the commission is a taxable supply of service. GST must be charged on brokerage amount. There is generally no exemption to keep such intermediary activity outside GST.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9615 Points Posted on 02 October 2024

You are correct. Broker 'B' is an intermediary and liable to charge GST on their commission earned, which is Rs. 3000/- in this case. As per the GST laws, a GTA (Goods Transport Agency) is liable to pay GST on the services provided. In this case, Broker 'B' is providing intermediary services and earning a commission, which is a taxable supply. Broker 'B' should charge GST on their commission of Rs. 3000/- and issue an invoice to 'A' (GTA). The GST rate would depend on the type of vehicle and the location of the supplier and recipient.