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IGST on Commission

Nimesh joshi (Office Executive ) (86 Points)

29 June 2021

We are getting commission from a German company for business generated in INDIA.

It not % basis.

It is like they give us X price. We get them order at X+10. So 10 is our commission.

Will this be taxable ?

If yes than whether under IGST. or GST.

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9 Replies

Prabhat Pandey (210 Points)
Replied 29 June 2021

Yes ,this will be taxable under IGST...

PRASANT BISOYI (249 Points)
Replied 29 June 2021

If the service you provide satisfy as an Intermediary Service u/s 2(13) of IGST Act then there will be GST implication (CGST&SGST),as the Place of supply of service will be the location of supplier of Service which is ur location.

Nimesh joshi (Office Executive ) (86 Points)
Replied 29 June 2021

Dear Sirs,

We have received two difference opinion and that is why we are confused. Which is the right ?

Mr. Prabhat Pandey is of the opinion that it will attract IGST and as per Mr. Prasant Bisoyi it will attract GST.

PRASANT BISOYI (249 Points)
Replied 29 June 2021

Dear Nimesh, whether we can consider this as an Intermediary Service or not?

As per section 2(13) of IGST Act, 2017“Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.

Imthias ahamed Kormath (910 Points)
Replied 29 June 2021

May consider section 11(i),(ii),&(iii) of IGST Act in this regards?

Guru Karthick (45 Points)
Replied 29 June 2021

Yes, it is taxable under GST.

Imthias ahamed Kormath (910 Points)
Replied 29 June 2021

What is GST rate on X or commission?

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 30 June 2021

As per Your Query , yes you cover 100% under Intermediary Services.

What is Intermediary Services ? In term of Section 2(13) IGST Act , Agent, Broker who arranges or facilitates the supply of goods or services or both between two persons without material alterations or further processing.
Thus Intermediary is involved with two supplies at any one time :
(a) supply between principal & the third party : and
(b) supply of his own services to his principal for which a fee or commission is charged.

So commission income in term of Section 7 is supply , hence it is taxable in GST & The applicability of CGST/SGST or IGST for Intermediary services is prescribed in Section 13(8)(b) of IGST Act which states that Place of supply for intermediary Services is Location of Supplier of Services, hence CGST/SGST is applicable.

Charge CGST/SGST.

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Imthias ahamed Kormath (910 Points)
Replied 30 June 2021

The place supply of service is India,so it is imported service.value of service is value of service+igst ,then total value+commission,gst may charged on commission,is it may consider on above aspects.