Rule 33 - Value of supply of services in case of pure agent

Pure agent supplier: third-party payments excluded from taxable service value when payer authorization, separate invoice, and no title taken

When a supplier acts as a pure agent of the recipient, expenditures paid to third parties are excluded from the taxable value of services if: the supplier pays on recipient's authorization; the payment is separately shown on the supplier's invoice; and the third-party supplies are additional to services the supplier provides on its own account. A 'pure agent' has a contractual appointment, does not take title to or use the procured goods or services for its own benefit, and recovers only actual amounts incurred in addition to its own service charges. An example is recovery of compulsory government fees paid on the recipient's behalf.