Levy of GST — Authority for Advance Ruling — Pure Agent – The applicant are crew Recruitment & Placement Agency and have been selecting & recruiting the shipping personnel on behalf of Foreign Ship Owner & have been charging Administration fees for the same & paying GST on the Administration charges so received. The RBI vide Circular dated 24.09.2015 has allowed for opening of Foreign Currency Account by Ship Manning/ Crew Management Agencies, vide which the credit to such foreign currency account would be through normal banking channels from the overseas principal and the debits would be towards various local expenses. The applicant submitted that their principal has requested for disbursal of salary to the crew members from their side. For this activity, the applicant would be charging/ invoicing service charges to the principal. The applicant submitted that in view of Rule 33 of the Rules, the expenditure or costs incurred by a supplier as a Pure Agent of the recipient of supply shall be excluded from the value of the supply. The applicant sought an advance ruling as to whether GST is applicable on Reimbursement of salary on behalf of foreign entity.
Held that:- The Hon’ble Authority for Advance Ruling held that the applicant would be acting as a pure agent in as much as the entire amount received by them as Crews’ Salary will be disbursed to the Crew. For performing as a pure agent they will also be receiving compensation separately in the form of fixed fees to be charged as service charges. Accordingly, the applicant will not be liable to pay GST on Salary amount received and disbursed to the Crew.DRS Marine Services Private Limited [2018] 3 TAXLOK.COM 91 (AAR-MAHARASHTRA)