GST on commission and Input Credit on the same

ITC / Input 10264 views 5 replies

Sweta Agarwal

32 Points Joined June 2017

Will we be liable to pay GST under Reverse Charge on Commission paid to unregistered Entity/Person?

If yes, shall we be allowed to take Input Credit of such amount?

Moreover, will GST be levied if we receive commission from outside State(West Bengal), even though we are not required to get registration as we fall under ₹20,00,000 criteria.?

Replies (5)

CA Anoop Tiwari

Practicing Chartered Accountant

135 Points Joined June 2009

Dear Sweta,

In response to your first query about credit eligibility of GST paid under.have revrse charge.

Read Section 16

Yes you will be eligible to take credit of such GST paid as you are registered person and have taken supply(services) for furtherence of your business.

In second question you asked for registration,

Read Section 22 person liable to registration

Whose aggreegate turnover in a finacial year exceeds Rs. 20 Lakh rupees. Here your turnover is less than Rs. 20 lakh so registration is not mandatory but the the person who is paying commission to you will be liabe to pay GST under RCM if registered.

Sweta Agarwal

32 Points Joined June 2017

This is what the doubt is.. I need not take registration as my turnover is less than 20lakhs, and the person whom m paying Commission is unregistered. In that situation shall I have to take registration and pay GST?

CA Anoop Tiwari

Practicing Chartered Accountant

135 Points Joined June 2009

Read Section 24

In case of interstate taxable supply registration is mandatory irrespective of turnover, so you can not provide services from West Bengal to any other state until get registered under GST.

Sweta Agarwal

32 Points Joined June 2017

The case is somewhat like this

I am a Sales agent, selling goods on behalf of my principal producing goods and registered in TAMIL NADU. I earn ₹10,00,000 as commission for giving him services by selling his goods.

Is registration mandatory in this case?