The applicant cannot be categorized as a “pure agent” as such he is engaged in the supply of labour service which attracts 18% GST
Classification of service— In the instant case, it is observed that applicant intend to work as a pure agent of the company that will be the recipient of the labor supply service; that they will make payment to the third party (labour) for the labor supply service procured by the company as such the contract for labor service is between third party and the company that will receive the labor service; they will act as a pure agent of the company; the company authorizes applicant to as a pure agent; the company receiving the labor supply service is liable to make payment to the third parties (labor); that the payment will be made by the applicant on behalf of the company to the third party i.e. labor and the same amount has been indicated separately in the Invoice issued by them to the company; that they will issue two types of Invoice
1. Bill for reimbursement of salary payment made to the labour on behalf of the company
2. Bill for service and consultation fees for the month. Accordingly, the moot question before us is to decide whether the applicant covers within the ambit of conditions defined to be a pure agent under CGST Act/ Rules for providing service to the company or otherwise.
Held that— it is observed that the applicant does not satisfy any one of the conditions mentioned in the Rule 33 of CGST Rules, 2017 which are required for acting as a “pure agent”. Hence we conclude that the applicant cannot be categorized as a “pure agent” as such he is engaged in the supply of labour service.
The Service provided by the applicant merit classification under SAC 998519 and applicable rate of GST would be 18%