Page 14 - Chapter 2.cdr

Therefore the value of taxable supply will be `2,00,000. CCP 02.12.33.00
Mr. Raj, an artist, appoints M/s B (auctioneer) to auction his painting. M/s B
CH 2 CCP 02.12.32.00 (Para 3)
arranges for the auction and identifies the potential bidders. The highest bid is
Mr. Veer is a supplier of goods located in Mumbai has appointed Mr Rudra to accepted and the painting is sold to the highest bidder. The invoice for the
Charge of Tax & Concept of Supply
procure goods based on a specification given by him. As the same kind of goods supply of the painting is issued by M/s B on the behalf of Mr. Raj but in his own
are not available in area of Mr. Veer & So on his behalf Mr. Rudra buys the name and the painting is delivered to the successful bidder. Whether it is to be
specified goods from M/s XYZ Ltd. and for this activities invoice is issued in the treated as a supply under GST?
name of principal. Whether it is to be treated as a supply under GST? Would your Answer: Legal Provision:-

answer differ if invoice is issued in name of an agent Mr Rudra? As per sec 7 read with Para 3 of Schedule I of CGST Act, 2017 – Supply of goods—
Answer: Legal Provision:- As per sec 7 read with Para 3 of Schedule I of CGST Act, (a) by a principal to his agent where the agent undertakes to supply such goods on
2017 – behalf of the principal; or
Supply of goods— (b) by an agent to his principal where the agent undertakes to receive such goods on
(a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal
behalf of the principal; or Is covered under the scope of supply, However as per recent clarification issued by
(b) by an agent to his principal where the agent undertakes to receive such goods on CBIC via Circular No. 57/31/2018-GST All the activity carried by agent where agent

behalf of the principal. issues their own invoice are included.
All the activity carried by agent where agent issues their own invoice Discussion:-
are included. As per the aforesaid provisions in the given case above, M/s B is not merely providing
Is covered under the scope of supply, However as per recent clarification issued auctioneering services, but is also supplying the painting on behalf of Mr. A to the
by CBIC via Circular No. 57/31/2018-GST bidder, and has the authority to transfer the title of the painting on behalf of Mr. A.
where invoice for further supply is being issued by agent in his name, then it This scenario is covered under Schedule I.

would be covered under schedule 1 para 3.
Discussion:- As per the aforesaid provisions in the given case above , Mr Rudra has 13. Del credre Agent
been appointed just to procure the goods on behalf of Mr Veer (Principal) and is CCP 02.13.34.00
issuing invoice also in name of Mr Veer & and has in no way involved himself in the Mr. Viraj is a registered dealer under GST supplying taxable goods to large number
supply or receipt of the goods. Hence, in accordance with the provisions of this Act, of customers either directly or through Mr. Tushar, who guarantees payment on
Mr. Rudra is not an agent of Mr. Veer for supply of goods in terms of Schedule I. behalf of buyer to the seller. Mr. Tushar charges a commission of 12% whereas

Yes, if invoice is in the name Mr. Rudra, then it will fall within the scope of other agent charges commission @ 10% for similar services. The only difference
para 3 & transaction will be treated as supply. was that Mr. Tushar guarantees payment from buyers whereas other agent does
(ii) Yes, if invocie is issued in the name of Rudra then it will fall within the scope of not provide any such guarantee to the principal supplier. Goods worth ₹ 5 lakhs
para 3, transaction will be treated as supply
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