HJK Ltd. a manufacturer of Cotton Grey Fabrics having its registered office located in Coimbatore, Tamil Nadu in the month of January, 2020 had imported a fabric making machinery from a supplier of Italy. HJK Ltd. entere

CS Professional · Advanced Tax Laws and Practice · PYQS · December 2020
HJK Ltd. a manufacturer of Cotton Grey Fabrics having its registered office located in Coimbatore, Tamil Nadu in the month of January, 2020 had imported a fabric making machinery from a supplier of Italy. HJK Ltd. entered into a contract agreement with RS Logistics Pvt. Ltd. a licensed customs broker having its office located in Bengaluru, Karnataka, to carry out and meet all the necessary legal formalities for getting the said machine cleared from the customs station of Kandla Port and thereafter to deliver the same to them in Coimbatore. HJK Ltd. also authorised RS Logistics Pvt. Ltd. in this context under the agreement to incur on their behalf, the various expenses in relation to clearance of the imported machine, payment of duties and charges which shall stand to be reimbursable to them on actuals. RS Logistics Pvt. Ltd. after clearance of machine raised an invoice in February, 2020 on HJK Ltd. as under: Particulars Amount (₹) Agency charges 6,40,000 Unloading of machine at Kandla port, Gujarat 50,000 Prepared and submitted Bill of Entry and customs duty paid 5,00,000 Dock dues paid 50,000 Travelling expenses 40,000 Telephone and other expenses 12,000 You, in this backdrop, are required by taking that the conditions specified in rule 33 of the CGST Rules, 2017 stand satisfied : (a) to state the applicable provision of Rule -33 of the CGST Rules, 2017 and the nature of service provided by RS Logistics Pvt. Ltd.

Answer & Explanation:

Pure Agent under rule 33 of the CGST Rules, 2017 means as person who: enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply; neither intends to hold nor holds any title to the goods or services both so procured or supplied as pure agent of the recipient of supply; does not use for his own interest such goods or services so procured; and receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. Service provided by RS Logistics Pvt. Ltd. to HJK Ltd. of Coimbatore is in the nature of a 'Pure Agent' for the clearance of machine from the Custom station for the reason that the conditions specified in Rules 33 of the CGST Rules, 2017 stand fulfilled.

Topics: Goods and Services Tax (GST)

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