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Therefore, the relationship between the provider and the recipient with respect to the main service is based on the principle-to-principle relationship. The relationship between them in relation to other ancillary benefits is that of a pure agent. Before moving on to the concept of pure agent, we should understand the term “agent” defined in section 2 (5) of the CGST Act, 2017: the concept was borrowed from the old provision of the 2006 Value Rules Services Tax and presented under GST. According to the 2017 GST evaluation rules, a pure agent obtains the following meanings. A person, including the agent, the commission, the agent del Creder, the auctioneer or any other person who conducts a transaction to deliver goods and services on behalf of another person is a pure agent. The pure agent is a person who provides goods and services to the recipient. It undertakes to receive ancillary services from other suppliers of goods and services and pays expenses for its client. Subsequently, the expenses actually incurred are considered reimbursements. If the pure agent does not use the goods or services thus obtained for his own benefit. While the relationship between them with respect to the primary service is based on a primary basis, the relationship between them with respect to other ancillary services is that of a simple agent. In the above situation, agency revenues and travel/hotel expenses are added together to determine the value of the delivery by the customs broker, while port and customs taxes are not added to the value, provided the conditions of the simple agent are met.
Some other examples of Pure Agents are: 3. Company Incorporation Service: “SUB Pvt. Ltd. ” is employed with legal work related to the creation of an X business. In addition to the service charge, “SUB Pvt. Ltd.” also charges X the registration and authorization fee for the company name, which has been paid to the Registrar of Companies. The fees charged by the Clerk for the registration of the company and the authorization of his name are mandatory deducted from X. “SUB Pvt. Ltd.
acts only as a pure agent for the payment of these fees. Therefore, “SUB Pvt. Ltd.,” the recovery of these fees is a payment and is not part of the value of the offer of “SUB Pvt. Ltd.” to X. As such, the concept of pure agent has a direct influence on the total turnover of the supplier. It is therefore not included in the calculation of the registration threshold. 8. Goods or services obtained by the provider from the third party as a mere representative of the serviceholder are added to the services he provides on his own account According to GST law, another remedy has been granted to the provider of goods and services by excluding expenses as a pure agent from the total turnover. As such, the concept of pure agent has a direct influence on the total turnover of the supplier. It is therefore not included in the calculation of the registration threshold.
4. Agent`s obligations and obligations: The contract may require the agent to comply with the following obligations: Section 2, paragraph 5: “Agent” means a person, including a postman, a broker, a representative of the Commission, Arhatia, a credere agent, an incense agent or other commercial agent, under any name, who performs the activity of delivery or receipt of goods or services or both on behalf of another.