Payments to a dealer or commission paid to a dealer are considered a service and should be classified under the Service Accounting Code (SAC) rather than the HSN (Harmonized System of Nomenclature) code that is used for goods.
The SAC code for commission and brokerage services falls under heading 9971, which covers financial and related services.
Specifically, dealer payments can be classified under:
9971.10: Services provided by commission agents for purchase and sale of goods
9971.90: Other services ancillary to financial services
For GST purposes in India, the GST rate for services classified under SAC code 9971, including commission and brokerage services, is generally 18%.
