My company works with a stockbroker in order to trade in the Indian stock market (NSE). Our agreement is that whatever profits we make, at the end of the month we shall share it (say, in 50:50 ratio).
Now, since the trading is done through the broker, the profits are credited to their account, which they then transfer to my company. But this would attract GST, since if the revenue exceeds 20L in the year we would need to pay GST at 18%.
My question is, is there a way that this GST can be saved? I feel this should not be incurred, since we are working on a profit sharing model and it is not that we provide a service to the broker for which he is paying us; we generate this revenue together and now it just needs to be appropriately allocated.
Also, if I enter into a formal profit sharing agreement with the broker, would that allow him to pay me without incurring GST? And would that apply to whether the payment is made to my company or myself personally?
Any help/advice would be appreciated, thanks
CAclubindia
