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CA Akshay Hiregange

CA Akshay Hiregange (Partner - Audit & Assistance)     30 June 2021

IGST on Commission

Activities to be done before making decision:

1. Transaction has to be clearly understood. Firstly is it goods or services? 

2. Secondly, when supplying to the end customer, is the transaction taking place of a principal - to - principal basis? 

3. Give at X price means? Import of goods with payment of money X to german entity? Title/possession to be verified.

4. Agreement with German company to be reviewed

Intermediary services is under the scanner based on contradicting rulings. Recent HC ruling in favour of assessee - https://taxguru.in/goods-and-service-tax/gst-validity-section-138b-intermediary-service-hc-judges-differs.H T M L 

 



 9 Replies

Prabhat Pandey

Prabhat Pandey   29 June 2021

Yes ,this will be taxable under IGST...
PRASANT BISOYI

PRASANT BISOYI   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

Nimesh joshi (Office Executive )     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

PRASANT BISOYI   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

Imthias ahamed Kormath   29 June 2021

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

Guru Karthick   29 June 2021

Yes, it is taxable under GST.
Imthias ahamed Kormath

Imthias ahamed Kormath   29 June 2021

What is GST rate on X or commission?
Pankaj Rawat

Pankaj Rawat (GST Practitioner)     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.
1 Like
Imthias ahamed Kormath

Imthias ahamed Kormath   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.

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