## Liability of Commission Agents (APMC Act) to Register

Applies where a commission agent (B) facilitates sale/purchase of agricultural produce for a principal (A) under the APMC Act.

### Who is the supplier? — Look at the invoice

If invoice issued by Principal (Mr. A): B is NOT treated as an agent under Schedule I.
If invoice issued by Agent (Mr. B): B IS an agent under Para 3 of Schedule I → supply between principal and agent is a deemed supply even without consideration.

### Registration position of the commission agent

1. Section 24 (compulsory registration of agents): Triggered only when:

The principal is a taxable person, AND
The supply is taxable.

Since most APMC principals are agriculturists (non-taxable persons) and agricultural produce is generally exempt, section 24 does NOT bite.

2. Section 23(1)(a): Commission agents dealing exclusively in sale/purchase of agricultural produce make only exempt supplies → not liable for registration.

3. RCM liability for other services: If the commission agent provides other services on which tax is payable under RCM (or makes other taxable supplies), they must register mandatorily.

Worked example

### Example 1

Example: Farmer A sells paddy through commission agent B in an APMC mandi. Invoice raised in farmer A's name. B is not treated as an agent under Schedule I — no deemed supply, no registration on this account.

### Example 2

Example: Commission agent C invoices buyers in his own name on behalf of farmers. C is an agent under Para 3, Schedule I → it is a deemed supply. BUT the supply is of exempt agricultural produce → C is exempt u/s 23(1)(a) and not liable to register.

### Example 3

Example: Commission agent D, besides handling agricultural produce, also rents godowns to traders. Rental service is taxable; D must register.

⚠️ Common exam mistakes

Assuming all commission agents must compulsorily register under section 24 — section 24 applies only where principal is taxable AND supply is taxable.
Ignoring that invoice issuance determines whether agent status under Schedule I applies.
Forgetting that if the agent makes OTHER taxable/RCM supplies, registration becomes mandatory regardless of the agricultural produce exemption.

Bare-Act text Section 24 read with Schedule I, Para 3 of CGST Act, 2017 · CGST Act, 2017 · click to expand

Schedule I, Para 3: 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 — shall be treated as supply even without consideration.

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Registration of APMC Commission Agents

Worked example

⚠️ Common exam mistakes