Earlier, under the service tax law sub brokers were not liable to pay service tax as liability of sub broker was discharged by main broker. They were not liable to get registered.
Now under GST regime, agents/ sub brokers are liable to get themselves registered due to provision of compulsory registration as defined in The Goods & Service Tax Act.
U/s 24 (vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise.
Section 2(5) of The Central Goods and Services Tax Act, 2017 provides for definition of agent as follows: “agents” means a person including a factor, broker, commission agent, arhatia, del credere agent, or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another.
In terms of provisions of Section 2(13) of the 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
Under GST every business entity has to make registration in all the states where they are having operational place of business for providing goods or services. For Example a business entity having registered address in Delhi and also having operational place in Pune-Maharashtra have to get itself registered with Maharashtra State i.e. SGST and also disclose all other branches in that state. In every state business entity will be having registered address and all its branches registered under SGST
Therefore all sub brokers, IFA, Agents, etc normally will get registered with them for providing services with there respective branches in that district and therefore question of providing interstate services does not come, except big sub brokers, IFA, Agents who are doing business interstate suppose having one office in pune and another in jaipur.
Persons having turnover below 20 lacs and also subject to reverse charge mechanism are exempted from taking GST registration. Government ultimately getting there tax dues so there is no litigation. Problems arises when Government does not get any part of due taxes.
Government is very clear is deciding the threshold limit of Rs. 20 lacs as exemption for every one in that state (except few sates having 10 lacs as limit). Government cannot again bifurcate business entities within the states once threshold limit of Rs. 20 lacs exemption is set for that state.
Misconception and applying of wrong mind to the notifications is very clear who have dealt with main brokers & mutual fund distribution houses
Sub Brokers, IFA, Mutual Fund Distributors, etc having turnover below Rs. 20 lacs and having local clients within that state are exempted from GST Registration