/** * The main template file * * This is the most generic template file in a WordPress theme * and one of the two required files for a theme (the other being style.css). * It is used to display a page when nothing more specific matches a query. * E.g., it puts together the home page when no home.php file exists. * * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ * * @package WordPress * @subpackage Tally * @since 1.0.0 */ ?>
A pure agent is a registered taxable person who liaises between other suppliers on behalf of his client. Under this concept, while providing services to the client, he also undertakes to receive other ancillary services from other service providers, and incurs expenditure on behalf of his client. The actual expenditure incurred by a pure agent is later claimed as reimbursement. In other words, over and above the value of services rendered to his client, any other expenditure incurred by a pure agent (on behalf of his client) will be a reimbursement.
A pure agent example could be, an importer authorising his direct supplier i.e. a customs broker to procure services from a 3rd party supplier such as a transporter.
Therefore, the relationship between the supplier and recipient with respect to the main service, is on a principal-to-principal basis. The relationship between them in respect of other ancillary services is that of a pure agent.
The concept of pure agent was first introduced in the erstwhile Service Tax regime. The same concept of pure agent in GST is applicable. A pure agent under GST is defined as a taxable person who:
A Pure Agent in GST, typically incurs the expenditure on behalf his client and later the actuals will be claimed as reimbursement. Thus, it needs to be clear whether this value mentioned in the pure agent invoice under GST , should be included or excluded in determining the taxable value of supplies made by the pure agent to his client.
In determining the value of taxable supply, any expenditure incurred by a supplier as a pure agent of the recipient shall be excluded from the value of supply. Thus, pure agent concept in GST, becomes more relevant from the point of determining the taxable value on which GST needs to be levied.
In order to be eligible for excluding the pure agent service value from the total value of supply, the pure agent need to satisfy the following conditions in addition to being a pure agent in GST.
The value will be allowed to be excluded from taxable value only when all of the above conditions are meet. In case conditions are not satisfied, such expenditure incurred shall be included in the value of supply.
For businesses engaged in providing pure agent services, it is very important to determine the value of pure agent service since it has a direct impact on the taxable value and the amount of GST to be levied. Also the businesses need to ensure that various pure agent conditions are satisfied so that they are eligible to exclude the pure agent value, and charge GST only on the actual value.
Best Way to Manage Books of Accounts When You Have Multiple GST Registration (GSTIN)