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Pure agent (Rule 33): for an expense incurred by the supplier as a pure agent to be EXCLUDED from value, which condition must be met?
AThe recipient is registered under GST
BThe amount is below Rs 5,000
CThe supplier holds a CA certificate
DThe supplier acts on the recipient's authorisation, separately indicates the amount, and the supplier provides only the supply on its own account besides the pure-agent service
Answer & Solution
Correct answer: D. The supplier acts on the recipient's authorisation, separately indicates the amount, and the supplier provides only the supply on its own account besides the pure-agent service
1. Rule 33 conditions to qualify as a pure agent (and exclude the pass-through amount from value):
2. (a) Supplier acts as a pure agent of the recipient when making the payment to the third party, on authorisation by the recipient;
3. (b) Payment by pure agent is separately indicated in the invoice; AND (c) Supplies procured from the third party as a pure agent are in addition to the supplier's own services and clearly identifiable.
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Rule 33_
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