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REGISTRATION OF AGENT WHO IS SUPPLYING TAXABLE GOODS IS MANDATORY

  • Posted By SuperCA
  • On 18 February

REGISTRATION OF AGENT WHO IS SUPPLYING TAXABLE GOODS IS MANDATORY

AAR recently gave an important ruling dated 12th September, 2019 regarding registration of agent for receipt of dry chillies from farmers & supply to traders in case of Morigeri . The applicant was into the business of rendering service of supplying dry chillies on behalf of farmers to the traders as commission agents. They sell goods on behalf of farmers to the traders, issue invoices to the traders/buyers as prescribed under the APMC Act and also issue sale patties to the farmers.

They collect a commission on the services provided to the farmers from the purchasers and the same is also shown in the invoice issued to the purchasers. The main issue that was involved in the matter was that whether the applicant is required to be registered under the GST Act or not?

AAR held that Schedule I of CGST Act, 2017 states that “Supply of goods—

(a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or

(b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.”

In this case, the applicant was selling goods on behalf of the principal, issues invoice to the buyer in his own name, receives a commission for such sale. Therefore the applicant is an agent as he the authority to pass on the title of the goods on behalf the principal. Supply of dry chillies by the applicant is chargeable to tax @5%

Thereby applicant, being a commission agent, is required to be registered under Section 22(1) of CGST Act 2017, as he qualifies to be an agent in terms of para 3 of Schedule I to the CGST Act 2017

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