GST Rate of 18% applicable on GST applicability on commission earned for facilitating cardamom sale: AAR
An application was submitted by M/s. Spice More Trading Company to the Kerala Authority for Advance Ruling (AAR) to get clarity on the GST treatment for the commission they earn by facilitating cardamom sales through auctions. This case was examined by Shri Jomy Jacob, IRS, and Shri Mansur M.I. The applicant is registered under GST with GSTIN 32ABYFS22670128 and ARN number AD320125003910T. The company is located at 11, KPXIV, Vattathara Buildings, Kumily Munnar Road, Kumily, Idukki, Kerala – 685509.
On April 2, 2025, a personal hearing for this matter was conducted. Shri Edwin Joseph John, one of the partners of the firm, appeared as the authorised representative.
Question: Is GST applicable on the commission earned by the cardmom auction company for the facilitation of the sale of cardamom?
Ruling: Yes, GST is applicable. The commission earned for helping in the sale of cardamom is taxable under the Notification No. 11/2017 – Central Tax (Rate).
Question: What is the rate to be charged on the commission if GST is applicable?
Ruling: The applicable GST rate is 18% which involves 9% CGST and 9% SGST.
Question: Are there any exemptions under the GST for this commission as taking consideration the company acts as an intermediary in the sale of agricultural produce?
Ruling: No specific exemption is applicable in this case. Even though the company deals with agricultural produce, since it acts as an intermediary or auctioneer, the commission it earns is a subject to GST.
The Advance Ruling Authority clarified that the commission earned by M/s. Spice More Trading Company for conducting cardamom auctions is taxable at 18% GST, and no exemption is available for this type of service.