Rule 33. Value of supply of services in case of pure
agent.-
Notwithstanding anything contained in the provisions
of this Chapter, the expenditure or costs incurred by a supplier as a pure
agent of the recipient of supply shall be excluded from the value of supply, if
all the following conditions are satisfied, namely,-
(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.
