What are the GST Compliances of an Authorised Partner?

Who is an Authorised Partner?

An Authorised Partner is either an individual or an entity hired by a stockbroker to bring in new clients, assist clients in trading, manage paperwork and provide market guidance. Authorised Partners act as an intermediary between the client and the stockbrokers and earn commissions based on the volume of trades executed by the broker’s clients.

Authorised Partners have to be approved by the stock exchanges, such as BSE and NSE and must be registered with the stockbroker. Any individual or entity with a basic understanding of the stock market and a minimum qualification of 10th or 12th Std can become an Authorised partner.

GST Compliance of Authorised Partners

As per the GST Act, any person providing goods or services on behalf of another person or entity is required to obtain GST registration, irrespective of their turnover. The Authorised Partners have to register under Section 24 (vii) of the GST Act via the official GST portal using your PAN card, partnership deed, and authorised signatory.

Since Authorised partners qualify as agents, they are charged 18% GST (SCGST 9% + 9% CGST) on their total earnings. There are three compliance categories:

• Compliance with Tax Invoices
• Compliance with GST return filing
• Compliance with GST registration

Invoices generated by the Authorised Partners must include the GSTIN, the recipient’s name and address, along with HSN/SAC codes for services. If the turnover of an Authorised Partner exceeds a set threshold in any financial year, they have to comply with the e-invoicing system.

GST liable on income earned by Authorised Partners must be paid to the government by the 20th of the following month when filing GSTR-3B. The Authorised Partners can claim ITC on the GST to reduce their tax liability by the GST paid on services or goods purchased for business purposes.

The Authorised Partners are required to maintain accurate and proper accounts and record all transactions in detail. They need to maintain the authorization details received from the principal, the quantity and value of services received or supplied on behalf of the principal and details regarding the tax paid. All records need to be retained for a minimum period of 72 months.