Whether Pure Agent and Intermediary are the same under Service tax laws

[Sanketh Meri]

Dear All,

Just wanted to know the difference between Pure agent under Rule 5(2) and Intermediary under POP Rule2(F).

If distinguished members can throw some light on this.

Also, please let me know whether both are mutually exclusive or we can use it simultaneously at respective places. What i mean is can we draft an agreement between two parties where all the essence of both Pure agent and Intermediary are present and revenue authorities cannot deny either of them.

AI Summary

Pure agent principle: pass-through cost recovery without profit, while intermediary arrangements permit commission and profit.
A pure agent acts under contract to incur costs for a service recipient, holds no title or use of procured goods/services, and is reimbursed only actual amounts, so recoveries are pass through and not includible in taxable value when documented; an intermediary arranges or facilitates services or supplies and charges facilitation fees or commission that may include profit and constitute taxable consideration. Proof hinges on absence of profit and contemporaneous documentation such as PO/SO/agreements, third party invoices and internal receipt records.