pure agent problem gst

[indranil basu]

There is a matter of Auto Rickshaw Dealer ,their sales bills as followsSELLING TO REGISTERED BUYER

Auto Rickshaw 120000

Insurance 20000

Registration at Rto 10000

GST rate is 12 %

Current billing process

Auto Rickshaw 120000

GST 14400

Insurance 20000

Registration at Rto 10000

TOTAL INVOICE VALUE 164400

ABOVE CONCEPT BASED ON PURE AGENT OF (WE HAVE AGREEMENT FOR PURE AGENT MATTER ) RULE 33

Insurance 20000

Registration at Rto 10000

PROBLEMS WE ARE FACING CURRENTLY

IN GSTR 1 WE WRITE AS FOLLOWS

TAXABLE VALUE 120000

GST 14400

INVOICE VALUE 164400(120000+14400+20000+10000)

NOW DEPARTMENT IS ASKING FOR REVERSAL OF EXEMPT SUPPLY FOR 30000 AS FOLLOWS

Insurance 20000

Registration at Rto 10000

ON OTHER SIDE THE BUYER IS FACING THE BELOW PROBLEM

THE BUYER IN HIS GSTR 2A HAVING TWO BILLS

OUR BILL RS 164400

AND INSURANCE COMPANY BILL 19000(TAXABLE VALUE ) +1000(GST) = 20000 SHOWING

NOW IN REGISTERED BUYER GSTR 3B

ONE INPUT RS 14400+1000 (INSURANCE)

AND INWARDS NIL RATED SUPPLY 30000

SUGGESTION WE RECEIVED TO BILL CUSTOMER

Auto Rickshaw 120000

GST 14400

AND THE FOLLOWING AS REIMBURSEMENT EXPENSES

Insurance 20000

Registration at Rto 10000

BUT IN THE SUGGESTION THE PROBLEM IS THAT - THE BANK FINANCE IS CURRENTLY GOING ON 164400 BUT IF WE TAKE THE SUGGESTION THE BANK FINANCE WILL BE 134400 BECAUSE BANK MANAGER IS CONSIDERING THE INVOICE VALUE

PLEASE GIVE ME THE SUGGESTION ,WE MUST HAVE TO SHOW INVOICE 164400 FOR FINANCE

Regards,

INDRANIL BASU

Contact no. +91 7003556438

[email protected]

AI Summary

Pure agent treatment: separately stated disbursements can be excluded from taxable value if strict contractual and invoicing conditions are met.
No reversal of ITC is required where amounts separately indicated are excluded as pure agent disbursements rather than treated as exempt supply. A pure agent must meet Rule 33 criteria: contractual authorization, no title to procured goods or services, no use for supplier's interest, and recovery only of actual amounts. Exclusion from value also requires payment on recipient authorization, separate invoice indication, and that such supplies are additional to the supplier's own services. If conditions are met, insurance and registration fees may be excluded from taxable value while the invoice can still show the total amount.