CGST Rules Rule 33 — Value of supply of services in case of pure agent
CGST Rules, 2017 · Value of supply of services in case of pure agent
Quick Answer
Rule 33 of the CGST Rules, 2017 governs Value of supply of services in case of pure agent. It establishes the detailed procedural framework and compliance requirements necessary to implement the corresponding provisions of the CGST Act. Rule 33 CGST: Value of supply of services in case of pure agent — eligibility, conditions, case laws and compliance impact under Indian tax law.
(i)the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient;
(ii)the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and
(iii)the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.
Explanation. - For the purposes of this rule, the expression "pure agent" means a person who-
(a)enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both;
(b)neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply;
(c)does not use for his own interest such goods or services so procured; and
(d)receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account.
Illustration. - Corporate services firm A is engaged to handle the legal work pertaining to the incorporation of Company B. Other than its service fees, A also recovers from B, registration fee and approval fee for the name of the company paid to the Registrar of Companies. The fees charged by the Registrar of Companies for the registration and approval of the name are compulsorily levied on B. A is merely acting as a pure agent in the payment of those fees. Therefore, A' s recovery of such expenses is a disbursement and not part of the value of supply made by A to B.
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CGST Rules Rule 33 was introduced as part of the CGST Rules, 2017.