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GST ON COMMISSION

MURALIDOSS (INCOME TAX PRACTITIONER) (1302 Points)

12 March 2020

SIR,

A DEALER PURCHASED RECHARGE CARD FROM A COMPANY FOR 100000/- MRP.

COMMISSION FOR THIS IS RS,5000/- SEPARATELY.

FOR THIS COMMISSION CAN WE RAISE A COMMISSION INVOICE FOR 5000/- +18% GST?

AND SECOND THING WE SALE TO RETAILER FOR THE SAME 100000/- MRP

AND COMMISSION FOR THIS IS WE GIVE 4000/- +18% GST

FOR US ONLY 1000/- IS COMMISSION AS NET RESULT.

HOW TO REDUCE THIS GST,

CAN WE ASK THE SAME COMMISSION INVOICE FROM THE RETAILER ALSO THEY HAVE TO PAY 18% RIGHT?

KINDLY SOLVE THIS PROBLEM.

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7 Replies

CA Akshay Hiregange (Partner - Audit & Assistance) (4515 Points)
Replied 12 March 2020

Dear Murgadoss,

Basic understanding is correct. Although, please note, if it is discount (on purchase or on sale) then credit note can be raised (with or without GST) to pass on the benefit.

If it is not discount, then GST would be liable, and you would need to raise 5,000 + 18% and obtain retailer invoice for 4,000 + 18% where ITC is eligible.

Anshuman Basu (account -GST) (1549 Points)
Replied 12 March 2020

1st u raised sell invoice/debit note to your party for rs 5000/-+ Tax. then you issue credit note to your retailer for rs 4000/-+ GST. you tax liability is difference (5000-4000)=1000/-+ GST

CA. Roopali Kadam (Jobs on assignment basis.) (1453 Points)
Replied 12 March 2020

I think you can raise invoice of 5000 inclusive of 18% GST

RAJA P M ("Do the Right Thing...!!!") (127264 Points)
Replied 13 March 2020

@ Mr MURALIDOSS.

I understand Your query. But, it's not cleared...
You are ask 2 question, Also You ask invoice raising for the two queries. But, Here one is Inward supply and other one is outward supply...

Am I right...?!

Lalit Pandey (Indian Business Researcher) (313 Points)
Replied 13 March 2020

First check your turnover for raising tax liability under gst, if yes, you can charge GST on Service provide by you and Goods selling by you, invoice above then 100 Rs.

MURALIDOSS (INCOME TAX PRACTITIONER) (1302 Points)
Replied 13 March 2020

YES RAJA SIR,

EXACTLY RIGHT SIR, FIRST WE PURCHASE AS A DISTRIBUTORS FOR THE VALUE OF RS.100000/- IN HERE THE COMPANY ISSUE THE INVOICE FOR 100000/- (INCLUDING GST OF 18% i.e 84745.76 + igst 15254.24 /- BUT THEY PUT THE TOTAL EPRS VALUE UNDER THE INVOICE IS RS.104986.88/-

IT MEANS 4986.88/- IS GST PAID COMMMISSION/DISCOUNT. RIGHT SIR?

NOW WE WANT TO SELL THE SAME TO RETAILER FOR 3500/- COMMISSION/DISCOUNT..

IN THAT INVOICE CAN WE JUST CHANGE THE EPRS VALUE AS 103500/- IS ENOUGH OR NOT?

SO THAT OUR PORTION OF INCOME ONLY RS.1486.88/- FOR THIS WE NEED TO PAY GST OR NOT?

PLEASE...

MURALIDOSS (INCOME TAX PRACTITIONER) (1302 Points)
Replied 13 March 2020

YES RAJA SIR,

EXACTLY RIGHT SIR, X LTD ISSUE SALE INVOICE FOR THE VALUE OF 100000/- (INCLUDING GST) TO Y LTD., (IDSTRIBUTOR) ALSO X LTD NOTE THE TOTAL EPRS VALUE UNDER THE INVOICE IS RS.104986.88/-

IT MEANS 4986.88/- IS GST PAID COMMMISSION/DISCOUNT. RIGHT SIR?

NOW Y LTD WANT TO SELL THE SAME TO Z LTD (b2b) FOR 3500/- COMMISSION/DISCOUNT..

IN THAT INVOICE CAN Y LTD JUST CHANGE THE EPRS VALUE AS 103500/- IS ENOUGH OR NOT?

SO THAT Y LTD PORTION OF INCOME ONLY RS.1486.88/- FOR THIS WE NEED TO PAY GST OR NOT?

PLEASE...