Question
My client is visa consultant and taking embassy fees and consultancy fees from clients. I can treat my client as pure agent.
Answer
The amount charged to the receiver as Pure Agent
is not to be included in Assessable value as per Rule 33 of CGST Rules.
In your case you are getting embassy fees and consultancy fees. The embassy fees
are to be paid by the receiver even if he is not taking consultancy. The embassy
fees paid to your client is received as Pure agent and therefore not included in
assessable value but the consultancy fees paid to your client by his customer
are not of the nature of Pure Agent.
So he should show both the amounts separately viz consultancy fees and embassy
fees (to be paid as per law). Thus the consultancy fees will be subjected to GST.
For your reference relevant portion of Rule 33 is reproduced below:
"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."
(Reply dt. 11.06.2018)