GST – States – 52/2018 – Dated:- 22-11-2018 – GOVERNMENT OF WEST BENGAL DIRECTORATE OF COMMERCIAL TAXES 14, BELIAGHATA ROAD, KOLKATA-700015 TRADE CIRCULAR No. 52/2018 (Circular No. 73/47/2018-GST) DATED: 22.11.2018 Subject: Scope of principal and agent relationship under Schedule I of WBGST Act, 2017 in the context of del credere agent. Post issuance of Trade Circular No. 40/2018 dated 17th September, 2018, various representations have been received from the trade and industry, as well as from the field formations (i.e. jurisdictional officers) 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 of implementation across field formations (i.e. jurisdictional officers), the Commissioner, in exercise of his powers conferred under section 168 (1) of the West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as WBGST Act ) hereb
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t to the DCA at a rate mutually agreed between DCA and buyer. Concerns have been expressed regarding the valuation of supplies from Principal to recipient where the payment for such supply is being discharged by the recipient through the loan provided by DCA or by the DCA himself. Issues arising out of such loan arrangement have been examined and the clarifications on the same are as below: Sl.No. Issue Clarification 1. Whether a DCA falls under the ambit of agent under Para 3 of Schedule I of the WBGST Act? As already clarified vide circular No. 40/2018 dated 17th September, 2018, whether or not the DCA will fall under the ambit of agent under Para 3 of Schedule I of the WBGST Act depends on the following possible scenarios: In case where the invoice for supply 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 woul
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s supplied (to the buyer) by the supplier. It may be noted that vide notification No. 1135-F.T. dated 28th June, 2017 (Sl. No. 27), 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 WBGST Act and makes payment to the principal on behalf of the buyer and charges interest to the buyer for delayed payment along with the value of goods being supplied, whether the interest will form a part of the value of supply of goods also or not? In such a scenario following activities are taking place: 1. Supply of goods by the supplier (principal) to the DCA; 2. Further supply of goods by the DCA to the recipient; 3. Supply of agency services by the DCA to the supplier or the recipient or both; 4. Extension of credit by the DCA to the recipient. It is clarified that in cases where the DCA
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