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TMI BlogScope of principal and agent relationship under Schedule I of JKGST Act, 2017 in the context of del-credre agentX X X X Extracts X X X X X X X X Extracts X X X X ..... lationship under Schedule I of JKGST Act, 2017 in the context of del-credre agent -Reg. Various representations have been received from the trade and industry, as well as from the field formations regarding the scope and ambit of principal agent relationship under GST in the context of del-credere agent (hereinafter referred to as "DCA"). In order to clarify these issues and to ensure uniformity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission paid to the DCA may be relatively higher than that paid to a normal agent. In order to guarantee timely payment to the supplier, the DCA can resort to various methods including extending short-term transaction-based loans to the buyer or paying the supplier himself and recovering the amount from the buyer with some interest at a later date. This loan is to be repaid by the buyer along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods is issued by the supplier to the customer, either himself or through DCA, the DCA does not fall under the ambit of agent. * In case where the invoice for supply of goods is issued by the DCA in his own name, the DCA would fall under the ambit of agent. 2 Whether the temporary short-term transaction based loan extended by the DCA to the recipient (buyer), for which interest is charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t form part of the value of supply of goods supplied (to the buyer) by the supplier. It may be noted that services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services) has been exempted. 3. Where DCA is an agent under Para 3 of Schedule I of the JKGST Act and makes payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the supply of the goods by the DCA to the recipient. It is emphasised that the activity of extension of credit by the DCA to the recipient would not be considered as a separate supply as it is in the context of the supply of goods made by the DCA to the recipient. It is further clarified that the value of the interest charged for such credit would be required to be included in the value of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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