Agent under GST: meaning and tax treatment

Principal-agent supplies

Schedule I, paragraph 3 treats as a supply the transfer of goods by a principal to an agent who will sell them on the principal's behalf, and by an agent to a principal where the agent has bought them for the principal. Tax is payable on these transfers even without consideration.

• The test is whether the agent issues the invoice to the customer in its own name
• An agent who only arranges a sale, with the principal invoicing the buyer directly, is a service provider earning commission
• Commission earned is a separate supply of services by the agent

Registration requirement

Section 24 requires persons making taxable supplies on behalf of other taxable persons, as an agent or otherwise, to register irrespective of turnover. A pure commission agent who never handles the goods in its own name may not fall within this compulsory category and is assessed on its own turnover.

Common errors

Mandis and brokers often mix the two roles: buying in their own name for some clients and merely brokering for others. Each arrangement should be documented in the agreement and invoices so the GST treatment is clear.

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This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.