The commission hsn code for an agent who earns commission on the sale or purchase of goods is SAC 9961 (wholesale trade on a fee basis, such as 996111) or 9962 (retail trade), and GST on commission is 18%. Brokerage on property goes under 9972, and commission of financial and insurance agents under 9971.
Some agents do not charge GST themselves: insurance agents and recovery agents are paid by the company, which pays GST under reverse charge. This page lists the codes, the reverse charge cases, an agent's bill and the farm produce exemption. Other service codes are on the SAC code hub.
Commission and brokerage: codes and GST rates
Item / SAC / GST- Commission agent in wholesale trade18%SAC 996111
- Commission agent in retail trade18%SAC 9962, such as 996211
- Property brokerage on sale or rent18%SAC 9972, such as 997221 or 997222
- Stock broking and financial brokerage18%SAC 9971
- Insurance agent commission to an insurer18%Insurer pays under reverse charge; see [insurance](/gst-on-health-insurance/)
- Recovery agent to a bank or NBFC18%Bank pays under reverse charge
- Commission agent selling farm produce in a market yardExemptAgricultural produce entry
- Business auxiliary and sales promotion18%Other support services
Quick facts
SAC heading
9961 wholesale trade on fee basis, 9962 retailGST rate
18% (9% CGST + 9% SGST)Reverse charge
Insurance agents, recovery agents and some othersExempt
Agents for agricultural produceDigits to print
4 digits up to Rs 5 crore turnover, 6 aboveCommon wrong code
998599 for every agent
Commission hsn code and sac code list
| Agent | SAC | GST |
|---|---|---|
| Commission agent, wholesale trade in goods | 996111 | 18% |
| Commission agent, retail trade | 996211 | 18% |
| Property broker, residential | 997221 | 18% |
| Property broker, non-residential | 997222 | 18% |
| Stock broker, securities | 997152 | 18% |
| Mutual fund distributor | 9971 | 18% |
| Insurance agent | 997161 | 18% under reverse charge |
| Recovery agent | 9985 | 18% under reverse charge |
| Agent for farm produce in a regulated market | 9961 | Exempt |
99611 sac code and 996111
Group 99611 is for services in wholesale trade on a fee or contract basis. 996111 covers agents for sale or purchase of goods who earn commission without taking ownership: textile agents, grain agents for non-agricultural goods, machinery agents and so on. The rate is 18%.
Gst on commission income and reverse charge
- Insurance agents: the insurance company pays 18% under reverse charge on commission paid to an individual agent. The agent does not charge GST.
- Recovery agents: a bank or NBFC pays under reverse charge on recovery agent fees.
- Business correspondents of banks for rural branches have an exemption in some cases.
- Direct selling agents for banks may fall under reverse charge in specified cases; check the current entry.
Gst on brokerage
Property brokers charge 18% on brokerage for sale, purchase or renting, under 997221 (residential) or 997222 (non-residential). Stock brokers charge 18% on brokerage under 9971. See rent for property renting itself.
Commission agent's invoice
Textile commission agent's bill: Commission on sale of fabric for the principal, SAC 996111, taxable value Rs 50,000. CGST 9% Rs 4,500. SGST 9% Rs 4,500. Total Rs 59,000.
Income tax deductions on commission are outside GST; the GST deduction rules are on the TDS on GST page. An agent must register if aggregate turnover crosses Rs 20 lakh (Rs 10 lakh in special category states). An agent who supplies goods on behalf of a principal, and issues invoices in its own name, must register regardless of turnover.
Agricultural produce agents
Commission agents (arhatiyas) who help farmers sell agricultural produce in a regulated market are covered by an exemption. This applies to agricultural produce as defined in the law, which excludes processed goods. Agents dealing in other goods charge 18%.
This guide to commission and brokerage is general information. Reverse charge and exemptions depend on who the agent is and whom it serves, so check the current services notification on the GST portal and ask a GST practitioner or chartered accountant about your agency.
Frequently asked questions
What is the hsn code for commission?
Commission on trade in goods is SAC 996111 (wholesale) or 996211 (retail), at 18%.
What is the GST rate on commission?
18% in general. Commission of agents selling farm produce in a regulated market is exempt.
Who pays GST on insurance agent commission?
The insurance company pays 18% under reverse charge.
What is the GST on brokerage?
Property and stock brokerage are taxed at 18%.
What is the 9962 hsn code?
9962 covers services in retail trade on a fee basis, such as 996211, at 18%.