GST Filing Guide for Commission Agents in Fruit & Vegetable Mandi (2026)

GST compliance for mandi commission agents (arhtiyas) is one of the most consistently misunderstood topics in Indian agricultural trade. The confusion arises because the mandi business involves two completely separate financial streams: the exempt agricultural produce stream and the taxable commission services stream. Getting this wrong costs you penalties, compliance notices, and potential license suspension from the APMC.

This guide — written for Kacha Arhtiyas, Pakka Arhtiyas, and wholesale agricultural traders — covers everything you need to know for 2026 GST compliance.

GST Registration for Commission Agents: When Do You Register?

You must register for GST if your aggregate annual turnover exceeds the following thresholds:

• Regular states: ₹20 lakh aggregate annual turnover (commission income only, not produce value)
• Special category states (Himachal Pradesh, Uttarakhand, J&K, North-East states): ₹10 lakh
• Interstate supply of goods/services: No threshold — registration mandatory regardless of turnover

Critical rule: As a Kacha Arhtiya (pure commission agent), the value of agricultural produce sold on behalf of farmers is not counted in your aggregate turnover for GST registration. Only your commission income (Arhat), storage charges, transport charges billed to buyers, and any other service fees are included. This means even if you handle ₹10 crore of produce in a year, your GST registration threshold is based on your commission income alone.

Is Agricultural Produce Exempt from GST?

Yes. Most unprocessed agricultural commodities sold in mandis are completely exempt from GST under the GST Exemption List (Schedule 1 of the CGST/IGST Notification):

Source: CGST/IGST Exemption Notifications. Verify current rates with your CA or the GST portal for commodity-specific updates.

What GST Does a Commission Agent Charge?

This is the most common point of confusion. Here is how it breaks down:

• Agricultural produce sold: ₹0 GST (exempt). Your Bijak/Parcha for agricultural produce is a zero-rated document.
• Your commission (Arhat): 5% GST under SAC Code 9986 (Support Services for Agriculture).
• Hamali / Palledari charged to buyers: 18% GST (if raised as a separate invoice to the buyer).
• Transport charges (if you bill separately): 5% GST (GTA services).
• Cold storage charges: 18% GST.

Most Kacha Arhtiyas structure their billing as: gross sale value (Nil GST) minus deductions, with a separate commission invoice to the buyer. MandiGrow's billing engine handles this split automatically.

GSTR-1 Filing: Step-by-Step for Commission Agents

What is GSTR-1 for a Commission Agent?

GSTR-1 is your monthly (or quarterly) outward supply return. As a commission agent, you report two types of supply:

1. Exempt Supply: The value of agricultural produce sold on behalf of farmers — reported in the "Exempt/Nil-Rated/Non-GST" column. This does not contribute to your GST liability.
2. Taxable Supply: Your commission invoices (Arhat bills at 5% GST), charged to farmers or buyers depending on your business structure.

Step 1: Reconcile Your Monthly Sales

At month-end, MandiGrow generates a Sale Register with every transaction categorized by GST type. Review and confirm the totals match your physical records.

Step 2: Generate the GSTR-1 JSON

In MandiGrow → Reports → GST Reports → GSTR-1 Export. Select the month. Download the JSON file (auto-formatted to GSTIN's required JSON schema).

Step 3: Upload to GST Portal

Log in to gst.gov.in → Returns → GSTR-1 → Upload JSON → Submit. For QRMP taxpayers (quarterly filers), use the IFF (Invoice Furnishing Facility) for month 1 and 2 and GSTR-1 for month 3.

Step 4: File GSTR-3B

GSTR-3B is the summary return where you pay GST. Your tax liability = 5% of commission income earned. Your ITC (Input Tax Credit) on business purchases (stationery, logistics software subscriptions, office furniture) can be offset against this liability.

E-Invoicing for Commission Agents: Do You Need It?

As of 2026, e-invoicing (IRN generation on the Invoice Registration Portal) is mandatory for businesses with annual turnover exceeding ₹5 crore. For most commission agents, this applies only to your taxable commission invoices. The agricultural produce Bijak/Parcha (Nil-rated) is typically not covered under e-invoicing.

If your commission income exceeds ₹5 crore annually: Every commission invoice (Arhat) must be uploaded to the IRP before delivery. MandiGrow supports e-invoicing API integration for agents above this threshold.

Common GST Mistakes Commission Agents Make (And How to Avoid Them)

• ❌ Including produce value in turnover: Do not count the sale value of farmer produce in your GST turnover. Only your commission income counts.
• ❌ Not charging GST on commission invoices: Your Arhat bill must have 5% GST (SAC 9986). Not charging this is non-compliance.
• ❌ Misclassifying dried spices as fresh produce: Dry chillies, turmeric, and pepper are 5% GST. Fresh produce is Nil. Incorrect classification on invoices triggers audits.
• ❌ Not issuing Delivery Challans for consignment sales: When produce is sent to buyers on a consignment basis, a Delivery Challan must be issued even if the final invoice is issued later.
• ❌ Missing the GSTR-1 deadline: GSTR-1 is due by the 11th of the following month for monthly filers. Late filing attracts ₹50/day penalty (₹20/day for Nil returns).

Frequently Asked Questions

Stop worrying about GST compliance. Start your free 14-day trial and let MandiGrow handle GSTR-1 automatically, so you can focus on your mandi business.