Transaction between principal and agent :
Supply of goods— (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal, or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal- – will be subj ect to GST – clause 3 of Schedule I CGST Act.
As per clause (a), the agent will be liable for GST on value goods or services only if he undertakes to supply any goods or services or both on behalf of any principal (like consignment agent). However, if the agent does not supply goods or services, he is not liable for GST on value of goods or services. He will be liable for GST only on his commission.
Clause (b) will cover cases where agent returns goods to Principal.
“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-section 2(6) of CGST Act.
“Principal” means a person on whose behalf an agent carries on the business of supply or receipt of goods or services or both – section 2(88) of CGST Act.