Gst on sub broker & authorised person of a stock broker

cmg_tax@yahoo.co.in

Please help in seeking clarification as sub brokers and authorised person only provide service. SUB BROKERS DO NOT CHARGE ANY SERVICE TAX OR GST ON THE CONTRACT NOTE. THE END CUSTOMER PAYS THE NET CONTRACT NOTE VALUE WHICH IS INCLUSIVE OF SERVICE TAX TO THE BROKER DIRECTLY. THE CONTRACT NOTE IS ISSUED DIRECTLY BY THE BROKER. HOW CAN A SUB BROKER PAY GST FROM HIS POCKET @ 18 % WHEN WE IS NOT COLLECTING AND GST FROM THE CUSTOMER? PLEASE ADVISE on my email ID cmg_tax@yahoo.co.in

According to my broker, AP and sub broker will also apply for GST. broker will pay incentive+18%GST. And sub broker will pay GST to department

 

Summary for GST Applicability to Sub Brokers & Authorised Persons: (as on 04-07-2017)

Hi Friends and All Concerned,

Hope you find the below helpful. The points below have been made in consultation with Brokers, Stock brokers, Chartered Accountants, Lawyers, Tax Consultants and Other learned people.

Please note the GST rules and awareness is/are, changing/updated practically every day. In-case you feel that certain facts are wrong or not correct, please feel free to ping at the numbers mentioned  below. ** Please consult with your Chartered Accountants, Lawyers, Main brokers **

• GST registration is not mandatory for every Sub Brokers & Authorised Persons.
• Sub Brokers & Authorised Persons need to register for GST only if their annual turnover is above 20 lakhs (or 10 lakhs as in some states)
• Annual Turnover of Rs 20 Lakhs means , the commission that you receive from your broker. YOUR NETT FINAL PAYOUT. (Eg. If in a particular month you make a total brokerage of Rs 1,00,000/- and your sharing with your main broker is 50 : 50, then you will get commission of Rs 50,000/- This 50,000/- is your turnover.
• If someone does other business eg. MF, Insurance, Other financial products, or any other products under the same name and the total commission for all the products is more than Rs 20,00,000/- then YOU WILL HAVE TO REGISTER FOR GST.
• If you register for GST, you will have to make a invoice in the name of your broker at the end of every month and charge GST. . (Eg. If in a particular month you make a total brokerage of Rs 1,00,000/- and your sharing with your main broker is 50 : 50, then you will get commission of Rs 50,000/-

You will raise your broker the following bill. (as per govt. format)

Bill / Invoice To Main Broker:
Total Payout earned or commision	50,000.00
Add CGST @ 9 %	4,500.00
Add SGST @ 9 %	4,500.00
BROKER WILL PAY YOU ---->	59,000.00
This 9000/- you will have to deposit to the government account
if you have any input credit you can adjust the same

 

Please note that there will be no change in dealing with your customers. There is no charging the customers.

Hope this is helpful. Please ping on < amit.khanna8@yahoo.com > or +91 9831074224  if you have any additional information or update.

Regards’

 

Summary for GST Applicability to Sub Brokers & Authorised Persons: (as on 04-07-2017)

Hi Friends and All Concerned,

Hope you find the below helpful. The points below have been made in consultation with Brokers, Stock brokers, Chartered Accountants, Lawyers, Tax Consultants and Other learned people.

Please note the GST rules and awareness is/are, changing/updated practically every day. In-case you feel that certain facts are wrong or not correct, please feel free to ping at the numbers mentioned  below. ** Please consult with your Chartered Accountants, Lawyers, Main brokers **

• GST registration is not mandatory for every Sub Brokers & Authorised Persons.
• Sub Brokers & Authorised Persons need to register for GST only if their annual turnover is above 20 lakhs (or 10 lakhs as in some states)
• Annual Turnover of Rs 20 Lakhs means , the commission that you receive from your broker. YOUR NETT FINAL PAYOUT. (Eg. If in a particular month you make a total brokerage of Rs 1,00,000/- and your sharing with your main broker is 50 : 50, then you will get commission of Rs 50,000/- This 50,000/- is your turnover.
• If someone does other business eg. MF, Insurance, Other financial products, or any other products under the same name and the total commission for all the products is more than Rs 20,00,000/- then YOU WILL HAVE TO REGISTER FOR GST.
• If you register for GST, you will have to make a invoice in the name of your broker at the end of every month and charge GST. . (Eg. If in a particular month you make a total brokerage of Rs 1,00,000/- and your sharing with your main broker is 50 : 50, then you will get commission of Rs 50,000/-

You will raise your broker the following bill. (as per govt. format)

Bill / Invoice To Main Broker:
Total Payout earned or commision	50,000.00
Add CGST @ 9 %	4,500.00
Add SGST @ 9 %	4,500.00
BROKER WILL PAY YOU ---->	59,000.00
This 9000/- you will have to deposit to the government account
if you have any input credit you can adjust the same

 

Please note that there will be no change in dealing with your customers. There is no charging the customers.

Hope this is helpful. Please ping on < amit.khanna8@yahoo.com > or +91 9831074224  if you have any additional information or update.

Regards’

 

I am a sub broker in Indian stock market. My broker has already charged July month GST from my clients and passed the same to me along with my incentive.

I got my business registered under GST on Aug 25th 2017. Is there any problem in paying July month invoice (because my GST registration completed in Aug month)?

Are you holding physical shares? They are likely to become zero in the first week of December, 2018. Appropriate solution to the Physical Shares problem can be expected from M/s 'M/s 5 Star Consultants', if contacted at: whatsolution4me@gmail.com

 

Sec. 24. Compulsory registration in certain cases

(1) Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act, ––

(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;

Would sub-broker fall in this category? 

As per Stock Brokers and Sub Brokers Regulation, 1992 issued by SEBI, a “sub broker” means “any person, not being a member of stock exchange, who acts on behalf of a stockbroker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stockbrokers”. However, even the sub-broker should be duly registered under Section 24(vii) of the GST Act 2017. The act clearly mentions that any individual or organization acting as such an intermediary requires compulsory registration and compliance under GST. All the top broking firms are registered and adhere to this practice.

 

Sec. 24. Compulsory registration in certain cases

(1) Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act, ––

(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;

Would sub-broker fall in this category? 

As per Stock Brokers and Sub Brokers Regulation, 1992 issued by SEBI, a “sub broker” means “any person, not being a member of stock exchange, who acts on behalf of a stockbroker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stockbrokers”. However, even the sub-broker should be duly registered under Section 24(vii) of the GST Act 2017. The act clearly mentions that any individual or organization acting as such an intermediary requires compulsory registration and compliance under GST. All the top broking firms are registered and adhere to this practice.

 

Under GST rules, tax is applied to the brokerage earned. However, the agent is not required to pay any GST on any amount recovered for delays if they meet pure agent status.

 

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