Dear Experts,
Good Evening.
We are Customs Broker and we perform the role of 'PURE AGENT' for speedy Customs Clearance of Import and Export Activity.
During this process, we normally receive advances from our Customer for the following :
1. Customs Duty
2. Airline / Shipping Line / Freight forwarders
3. Container Freight Stations / Warehouse
All these expenses are paid on behalf of our Customer and billed to Customers as pure agent without any mark-up on these bills.
Due to introduction of GST, few of our Customers raised the issue of 'Advance Payment requires to charged to GST'??
Kindly clarify.
Regards,
Nagarajan
Customs brokers face GST confusion: Advance payments taxed under Point of Taxation Rules, but 'pure agent' services are exempt. A customs broker acting as a 'pure agent' for customs clearance activities raised a query regarding the applicability of GST on advance payments received from customers for expenses like customs duty and freight charges. Experts responded with differing views: one stated that GST is due on the date of advance receipt as per Point of Taxation Rules; another clarified that 'pure agent' services are not subject to GST according to Valuation Rules. However, it was noted that when billing customers, the customs broker must charge 18% GST on their services. (AI Summary)
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