Guide
Pure agent (CGST Rule 33)
When a cost paid on a client’s behalf stays out of the GST value of supply: the pure agent conditions in CGST Rule 33, in plain words.
Rule 33 of the CGST Rules lets a supplier leave a cost it paid on its client’s behalf out of the value of its own supply, so no GST is charged on it, when it acts as a pure agent.
A pure agent has a contract with the client to act as its agent for the expense, does not hold or intend to hold title to what is bought, does not use it for its own interest, and receives only the actual amount incurred. The rule also asks that the client authorised the payment, that it is shown separately on the invoice, and that what was bought is in addition to the supplier’s own services.
A markup ends it: recovering more than the actual amount means the whole recovery is part of the supplier’s own supply and is taxed at the rate of its work.
In ReliTime
ReliTime records whether each recharged expense is a pure agent recovery or a marked-up one. A pure agent recovery is shown in its own disbursements section, added to the total and not to the taxable value.
This is a guide, not tax advice. Check how it applies to your own supplies with your adviser.
Related
Questions people ask
Can I add a handling fee to a disbursement?
Not as a pure agent. Charge the fee as a separate line of your own services, taxed, and keep the disbursement at exactly what it cost.
Why must disbursements be shown separately?
Because Rule 33 requires it. An invoice that folded them into the total would not meet the condition the exclusion depends on.
See it on your own kind of work
We set ReliTime up with a walkthrough rather than a sign-up form. We will take you through a working organisation, from a week of timesheets through approvals and work in progress to a GST invoice, answer your questions as we go, and set up yours.
Or write to hello@relitime.com.