Follow Us :

Meaning of Goods: As per Section 2(52) of the CGST Act,2017, goods means every kind of movable property other than money and securities but including actionable claim growing crops, grass and things attached to or forming part of the land which are agreed to be served before supply or under a contract of supply.

Meaning of Agent: As per Section 2(5) of the CGST Act,2017, Agent means a person, including a factor , broker, commission agent, arhatia, del credere agent m, an auctioneer or any other mercantile agent, by whatever name called, who carriers on the business of supply or receipt of goods or services or both on behalf of another.

Meaning of Pure Agent: As per rule 33 of CGST Rules,2017 ‘Pure Agent” means someone who while making a supply to the recipient, also receives and incurs expenditure on some other supply on behalf of the recipient and claims reimbursement (at actual, without adding any profits and not adding it to the value of his own supply) for such supplies  from the recipient of the main supply. Rule 33 of GST Rules,2017 explains the provisions regarding value of supply of services in the case of pure agent.

GST process and cycle Goods and Services Tax- Wholesaler retailer manufacturer consumer

The additional expenditure incurred during a supply on behalf of the recipient will not be considered a taxable supply, and thus should not be taken into account while calculating taxes. This is applicable subject to satisfaction of the following conditions:

(a) The supplier is a pure agent acting on behalf of the recipient and acts as per recipient’s authorization while making payment to a third party,

(b) Any such payment made by a pure agent to the third party should be separately mentioned in the invoice raised by the pure agent on the recipient,

(c) The supplies received by a pure agent from the third party should be in addition to the actual supplies serviced by him on behalf of the recipient.

Further , Pure Agent means a person (a) who has signed an official agreement with the recipient, according to which he will also incur any expenditure that may occur during the supply. (b) Doesn’t hold any right to the ownership of the goods or services being supplied, (c) doesn’t use any such goods or services for his personal interest (d) receives the actual supply value in addition to the reimbursement for any additional supply provided by him on his account.

Meaning of intermediary: As per Section 2(zl) of the notification no. 12/2017 CT(Rate) dated.28th June, 2017, Intermediary means as assigned to it in sub-section (13) of Section 2 of the IGST Act, 2017, as “Broker an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both 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.

Clearing and forwarding Agent:- As per Section 65(25) of the finance Act, 2012 Clearing and forwarding agent means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent.

Commissioner Agent: Commission Agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for  consideration, and includes any person who, while acting on behalf of another person:-

(i) deals with goods or services or documents of title to such goods or services or,

(ii) collects payment of sale price of such goods or services; or

(iii) guarantees for collection or payment for such goods or services ; or

(iv) undertakes any activities relating to such sale or purchase of such goods or services.

Services by agent or brokers including sub-brokers:  An agent is a person employed to do any act for another or to represent another in dealing with third person. No consideration is necessary to create an agency. As in the eyes of common law, principal and agent are one and the same so far as their dealing with the third person is concerned, a special deeming provision has been brought under the GST so that transaction in goods or services or both between principal and agent have been made taxable even in the absence of consideration through entry no.3 in the schedule-I of the GST Act. The move is aimed to ensure seamless movement of goods through supply chain without need of exchange of various forms in the course of intra-State and inter-State movement of goods between principal and agent vice –versa.

Broker: Broker’s prime responsibility is to bring sellers and buyers together, and thus, a broker is the third person facilitator between a buyer and a seller. An example would be real estate broker who facilitates the same of a property. Brokers also can furnish market information regarding prices, products and market conditions. Brokers may represent either the seller or the buyer but not both at the same time. An example would be a stockbroker, who makes the sale or purchase of securities on behalf of his client. Brokers  play huge role in the sale of stocks, bonds and other financial services.

Requirement of Registration for agent under GST Scenario:

As per Section 24(vii) of the CGST Act,2017, persons who make taxable supply of goods or services or both on behalf of other taxable persons  whether as  an gent or otherwise, are not eligible for the threshold limit of Rs. 20 Lakhs/10 Lakhs for registration. Therefore, agents are mandatorily required to obtain registration irrespective of their turnover.

Note: It is pertinent to note that with effect as per Notification No. 10/2017- Integrated Tax, dated 13th October, 2017 , the Government has exempted all service providers from obtaining registration even if the service provider is providing inter-State supply of services, provided that his aggregate turnover on PAN India basis is less than Rs.20 Lakhs (Rs.10 Lakhs in Special Category Specified States) in a financial year, But such exemption is given to Inter-State service providers under Section 24(i) of CGST Act,2017, therefore the exemption would not be available to agents under Sec.24(vii) of the GST Act, 2017. So, In my opinion   “ NO THRESHOLD LIMIT OF REGISTRATION FOR AGENTS”  under GST Scenario, They have to take registration maddatorily.

We have to classified the services of wholesale trade and retail trade under GST Scenario:

1. Services provided for a fee or commission or on contract basis of wholesale trade, the Service Accounting Code is 996111, as per GST Law,2017.

2. Services provided for a fee or commission or on contract basis on retail trade, the Service Accounting Code is 996211,As per GST Law,2017.

Value of supply made or received through an Agent : As per Rule 29 of the CGST Rules,2017, Value of supply of goods between the principal and his agent shall :-

(1) (i) be the open market value of the goods being supplied, or

(ii) At the option of the supplier, be 90% of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person, where the goods are intended for further supply by the said recipient.

(2) Where the value of a supply is not determinable under clause (1) the same shall be determined by application of rule 30 or rule 31 in that order.

Place of supply in the of Agency transactions under GST Scenario:

S.No Description When the supplier and recipient are Located in India When either the supplier or recipient are located outside India.
1. Intermediary Services Section 12(2) of IGST Act,2017:

(a)  If made to a registered person, Place of Supply shall be location of such person,

(b)  If made to any person other than a registered person, Place of Supply shall be:-

(i) Location of recipient where the address on record exists ; and

(ii) Location of supplier of services in other cases.

Section 13 (8) of the IGST Act,2017:

Location of supplier of services(Intermediary)

Section 13(2)of the IGST Act,2017: Location of recipient of services. Where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

2 Other than those providing

Input Tax Credit:

Input Tax Credit is available, unless used in providing of exempt services. Input Tax Credit shall be determined in accordance with Rule 42/43 of the GST Rues, based on taxable and exempted turnover.

Kindly refer and provided your feed back and suggestion on the above subject to my what’s app no.9848099490 or my mail

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.


  1. PRADEEP says:



    Dear Sir,

    Please send a suitable job for me but my language is in Hindi medium, so please care about it. I will do the all work very well.

    Thanks & Regards
    Rakesh Kumar Singh

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
April 2024