Commission HSN Code for GST Classification
Commission is a common form of income for agents, brokers, marketing partners and intermediaries who help close sales, bring new clients or arrange deals. It can arise in trade of goods, financial products, real estate, insurance and many other sectors.
To use the commission HSN code correctly and avoid mistakes in GST returns, businesses need to understand how different types of commission and brokerage are classified as services under GST and which GST rates usually apply after the changes from 22 September 2025.
What is the HSN Code for Commission and Brokerage
Under GST, commission and brokerage are treated as services. Instead of the goods HSN list, they are classified using the service accounting code structure that covers financial services, real estate services and other business support services.
There is no single code that covers every type of commission. Commission for sale of shares or financial products, brokerage for real estate, and marketing referral commission for bringing customers can each fall in different service headings depending on the main nature of the service.
In practice, most businesses identify whether the commission relates to financial products, real estate or general business promotion. They then select the nearest service accounting family and use that consistently for all invoices and GST returns for that activity.
Key Commission HSN Codes and GST Rates after 22 September 2025
| HSN Code | Service Description | Type of Commission or Brokerage | GST Rate |
|---|---|---|---|
| 9971 | Financial and related services | Brokerage and commission on shares, securities and other financial products | 18% |
| 9972 | Real estate services on a fee or commission basis | Property brokerage and commission for sale or renting of real estate | 18% |
| 9983 | Other professional and business services | Marketing and referral commission for bringing customers or orders | 18% |
| 9961 | Support services in transport and logistics | Commission received by transport agents or booking agents | 18% |
| 9997 | Other services not elsewhere classified | Miscellaneous commission income that does not fit clearly in the above groups | 18% |
How to Apply HSN Code for Commission Income in GST
To apply the correct code, start by asking what the main underlying activity is. If the commission comes from arranging sale or purchase of shares or mutual funds it usually falls in the financial services family. If it comes from arranging sale or lease of a flat or shop it generally falls in the real estate services family.
Where the commission is paid for pure marketing support, such as an agent who brings leads or orders without dealing in property or financial products, it is usually treated as a business support or professional service. In such cases, businesses may use a general business service or other service family for the commission income.
The same commission agent may earn different types of commission. For example, a firm may earn brokerage on property and also earn marketing commission for selling goods. It is good practice to keep separate service items in the accounting software for each type of commission and map each item to its own service code family.
Sales Commission HSN Code and Its Importance for GST Returns
In many trading businesses, sales staff or outside agents earn a percentage commission on sales. This sales commission is normally treated as a supply of service by the agent to the business and is taxed in the standard 18% GST slab unless a specific exemption applies.
When an agent raises an invoice for sales commission, the invoice should show the correct service HSN code, description of the commission service, taxable value and GST amount. The principal records this invoice as an expense and can claim input tax credit if the conditions for credit are met.
In GST returns, outward supplies of commission are reported under the service HSN or service accounting code. If the code is wrong or missing, it can create issues in data analytics by the tax department and may delay reconciliation of input tax credit for the recipient.
Wrong classification alone may not always change the tax rate because most commission services are in the standard 18% slab. However repeated mistakes or use of a code that suggests an exempt or lower rate service can attract notices and may lead to demand of differential tax, interest and penalties. Using the correct commission code from the start helps avoid such disputes.
Conclusion
The commission HSN code is chosen from the list of service accounting codes that cover financial services, real estate services and general business support services. The correct code depends on whether the commission relates to shares and financial products, property transactions or marketing and sales support.
Since most commission and brokerage services are standard taxable services they usually attract 18% GST under their respective service code families after the rate changes from 22 September 2025. When agents and businesses map each type of commission income to the right code and report it correctly in invoices and returns, they keep GST compliance smooth and reduce the risk of notices for wrong classification.
I’m CA Chintan Rathod, a Chartered Accountant based in Nagpur with over 4 years of experience. I specialise in Taxation, helping individuals and businesses plan and file their taxes accurately while staying compliant with the latest regulations. My approach is focused on practical, easy-to-understand guidance so clients can make better financial decisions with confidence.
Frequently Asked Questions
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What is the HSN code for commission?
Commission is treated as a service in GST and is classified using service accounting codes. Financial brokerage, property brokerage and marketing commission can fall in different service families depending on the underlying activity.
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How does commission income affect GST classification?
Commission income is a supply of service and is generally taxable at 18%. The exact service code used depends on whether the commission relates to financial products, real estate or general business promotion, but in most cases it remains in the standard slab.
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Is the HSN code for commission and brokerage the same?
The same service code can often be used for commission and brokerage if both relate to the same activity, such as securities brokerage or property brokerage. Where the nature of commission is different, separate service codes may be used to show the correct classification.
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How to enter commission HSN codes in GST returns?
While filing GST returns, outward commission income is reported with the matching service accounting code in the HSN summary, and the tax amount charged at 18% is shown in the outward tax liability. The recipient uses the same details to claim input tax credit if eligible.
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What happens if the commission HSN code is incorrectly filed?
If the commission code is incorrect but the correct rate of 18% has been used, the main impact is on reporting quality and risk of queries from the department. If a wrong code leads to a lower rate or exemption being applied, the tax officer can demand the short paid tax along with interest and penalties.