Scope of Principal-Agent relationship in the context of Schedule I of the CGST Act

Sep 05, 2018 | by Avantis RegTech Legal Research Team

In terms of Schedule I of the Central Goods and Services Tax Act, 2017, the supply of goods by an agent on behalf of the principal without consideration has been deemed to be a supply. In this connection, various representations have been received regarding the scope and ambit of the principal-agent relationship under GST.

The term “agent” has been defined under Section 2(5) of the CGST Act as follows: “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.

In order to clarify some of the issues and to ensure uniformity in the implementation of the provisions of the law across the field formations, the Central Board of Indirect Taxes and Customs (CBIC), has clarified these issues by giving explanation on the term “agent” and by giving scenarios of the principal-agent relationship.

[Circular No. 57/31/2018-GST]



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