AGENTS UNDER GST

[Dr. Sanjiv Agarwal]

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, 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;

Essential Attributes of an Agent

Following attributes are essential for anyone to be called an 'agent'-

1. An agent is a person,
2. Caries on business of supply of goods or services on behalf of another, or
3. Carries on business of receipt of goods or services on behalf of another,
4. An agent could be  any of the following :
   • factor
   • broker
   • commission agent
   • arhatia
   • del credere agent
   • auctioneer
   • mercantile agent
   • or any such other person by whatever name called.
5. There must be two persons, i.e., an agent and principal (another person)

Agent is a person engaged in receipt or supply of goods or services or both on behalf of other (generally called as 'principal'). Such agency arrangement may be disclosed or not. Further, what is more important is that agent should be engaged in any business of some other person and not necessarily as mentioned in the inclusive part of definition.

Agent as taxable person and to be registered

An agent shall be considered as a person making taxable supplies on behalf of another persons, whether for an agreed commission or a brokerage or not. Under section 24 of CGST Act, 2017, registration is compulsory.

An agent who is liable to be registered under section 24 of the subject to threshold exemption limit. The taxable threshold shall include all supplies made by a taxable person (which includes an agent) whether on his own account or made on behalf of his principal(s).

Supply of goods by or to agent without consideration to be treated as supply

In terms of Schedule-I to the CGST Act, 2017 read with Section 7, following supplies shall be treated as supply even if made without consideration:

Supply of goods-

1. by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or
2. by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.

Agent not to be considered as an intermediary

An 'agent' is defined in section 2(5) of the CGST Act, 2017 which does not include an 'intermediary' as defined in section 2(13) of the IGST Act, 2017. However, an intermediary shall be considered as an agent in term of the definition.