CA Priyank  Jain

Earlier, under the service tax law sub brokers 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 Central Goods and Services Tax Act, 2017.

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

In lay man language broker is an intermediary or negotiator in the contracting of any type of bargain, acting as an agent for parties who wish to buy or sell stocks, bonds, real or personal property, commodities, or services. A distinguishing feature between an agent and a broker is that a broker acts as a middleperson. When a broker arranges a sale, he or she is an agent of both parties. The GST Act clubs all intermediaries as ‘agents’ who carries on the business of supply or receipt of goods and/or services on behalf of another and clubs these entities together with commission agents, brokers, etc.

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Thus we can conclude that:

  • GST registration is mandatory for every Sub Brokers & Authorised Persons.
  • Turnover criteria of Rs. 20 lacs (Rs. 10 lacs) not applicable as sec 24 overrides sec 22.
  • If you register for GST, you will have to make a invoice in the name of your broker at the end of every month and charge GST. (Eg. If in a particular month you make a total brokerage of Rs. 2,00,000/- and your sharing with your main broker is 50 : 50, then you will get commission of Rs. 1,00,000/-

You will raise to your broker the following bill.

Total Commission   Rs. 1,00,000/-

Add CGST @ 9 %    Rs. 9,000/-

Add SGST @ 9 %     Rs. 9,000/-

TOTAL —->  Rs. 1,18,000/-

This Rs. 18,000/- you will have to deposit to the government account. If you have any input credit you can adjust the same. There will be no change in dealing with your customers. There is no charging to the customers.

Furthermore, if you are thinking not to get registered also the main brokers are still liable to pay GST on reverse charge for commission paid to sub broker/ franchisee. Hence it is advisable to get registered unless any specific notification or clarity not issued regarding non applicability og GST on Sub broker/ Agents etc.


The above views and the opinion expressed or implied are on the knowledge of the author and the individual or company is advised to take due care and judgement before taking informed decision.

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14 responses to “GST Guide: Sub Brokers/ Agents/ Intermediaries”


    sir, my business of dairy products received from lotus dairy and distribute to various lotus dairy booths from pickups and Rs. 900/- per day + Diesel received from lotus dairy. what amount taxable under gst or not & what liability for registration in gst or not. please help me sir

  2. AMRUTHA says:


  3. Jitendra says:

    Sir I m working in Pvt. Sector Factory and getting salary along with i have got commission from LIC and Brokerage from Mutual fund also. I am AP also but my income is less than 10 Lakhs. My Main Broker tell me to take GST Number otherwise surrender AP code. what to do ?

  4. Aasif says:

    sir, please provide a hsn code of sale & services commission under section 194c & 194h

  5. Aasif says:

    please provide HSN Code of commission or brokerage 194 H & 194c

  6. Sandeep Kumar Jindal says:

    What is impact on food grains mediators. what should they do. Is GST registration must for them who earn less than 2000000/

  7. Sandeep Kumar Jindal says:

    I am a rice broker from Kurukshetra Haryana. simply
    I file my ITR every year.
    Now it’s said that We are to get GST registration number And will have to pay GST at 9% each for GST and sgst.
    My annual income is lesser than 5 lakhs.
    Please guide me and oblige

  8. Pragna says:

    I am a SEBI registered sub-broker. My main broker is a member broker of exchanges and I get brokerage refund from him I have taken GSTIN no.Which form is to be filled and how to pay GST? Guidance in the matter will be appreciated..

  9. Vikflair says:

    Dear all,

    Let’s take an example. A subagent buys an air ticket from an actual airline agent (IATA agent).
    The invoice says published price 1000 and commission is 100, so end of the month this subagent will send an invoice to d main agent showing commission as 100 and get at 18% so 18 trs.then this subagent will deposit 18 Rs GST with d government.
    Now, let’s say this subagent further sold this ticket to a client at 1100 Rs. which means he further added a service charge of rs 100/- and thus earned Rs 200 total.
    How will he raise this invoice to d client. He will show price of ticket 1000 and service charge 100 and gat on service charge 18 so will make an invoice of 1118 to d client.
    However if he doesn’t charge any service charge to d client and thus makes an invoice only on d price of d ticket which is 1000 Rs, how will he make tax invoice in this case. Will he show GST as nil rated OR 0% or OR exempt GST OR Out of scope of GST.


    very informative, but please let me know the treatment in case of mutual fund

  11. Naresh Kumar Aggarwal says:

    In my opinion, sub broker/ authorised person is not liable to compulsory registration u/s 24(vii). It is the main broker who is liable to register, as per NSE rules Authorised person is the agent of the main broker and he is giving services to the main broker not to the client and charge commission.
    So, authorised person is liable only when his commission is in excess of Rs. 20 lacs and if he is not registered then main broker is liable under RCM.

  12. Chintan Shah says:

    For Equity sub broker, what is the SAC code???

    997152 Brokerage and related securities and commodities services including commodity exchange services. GROUP 99715

    Is this right????

    Please guide.

  13. Mahesh Vora says:

    CA Priyak Jain

    Good information and enlightened.I am not sure as to ,who prepares Invoice ? Trader/Builder ? As you have mentioned in your article ” If you register for GST, you will have to make a invoice in the name of your broker at the end of every month and charge GST” .As I have understood ,Broker will have GSTIN but Invoice will be generated and uploaded by Trader or Builder as the case may be.Please clarify on

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