Chapter 2 – Supply Under GST

Analysis of Para 3 of Schedule I

Criteria Details
Scope of Para 3, Supply of goods without consideration between principal and agent or vice
Schedule I versa is considered as supply.

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Goods vs Services Only supply of goods is covered. Supply of services without consideration
is not considered as supply.
Determining Factor Whether the invoice for further supply of goods is issued by the agent or
not.
Authority to If the agent issues the invoice in his name for further supply, it falls under

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Pass/Receive Title Para 3. If issued in the principal's name, it does not fall under Para 3.
Invoicing Goods procured by the agent on behalf of the principal and invoiced in the
agent's name are covered by Para 3.

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Clarification of Issues Pertaining to Del-Credere Agent (DCA)
Issue Details
What is a Del-Credere Agent A DCA is a selling agent who not only helps sell goods or services
(DCA)? for a principal but also guarantees payment to the supplier, acting
as insurance against default. The commission for a DCA may be
higher than that for regular agents.
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Issue 1: Agent Classification If a DCA issues the invoice for goods in his own name, he is
considered an agent under Para 3 of Schedule I. If the invoice is
AN

issued by the principal directly to the customer or through the

DCA, the DCA is not considered an agent.
Issue 2: Loan Provided by DCA When the DCA provides a temporary loan to the buyer and
to Recipient (Not as an Agent charges interest, this is considered a separate supply of service by
under Schedule I – Para 3) the DCA to the recipient. The interest charged does not affect the
value of goods supplied by the principal.
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Issue 3: Loan Provided by DCA If the DCA is considered an agent and provides a temporary credit
to Recipient (As an Agent to the buyer, this is part of the supply of goods. The value of the
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under Schedule I – Para 3) interest charged by the DCA is included in the value of goods
supplied by the DCA to the recipient.

Analysis of Para 4 of Schedule I

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Aspect Details
Scope of Para 4, Import of services by a person from a related person or from their
Schedule I establishments outside India, without consideration, in the course or
furtherance of business, is treated as "supply".
A

Relationship to Importation of services covered by Section 7(1)(b) does not include

Section 7(1)(b) importation without consideration.
C

CA NISHANT KUMAR 1
 Import of Services (At a Glance)
For Consideration Without Consideration
[Section 7(1)(b)] [Schedule I - Para 4]

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From Related Person/Distinct
Supply Establishment + Business Otherwise
Purpose

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KU
Supply No Supply

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AN
H
IS
N
A
C

CA NISHANT KUMAR 2