Calling a line item “reimbursement” does not automatically keep it outside GST value. The pure-agent exclusion is narrow and evidence-heavy. If the Rule 33 conditions are not met, recovered expenses can become part of taxable value.
CGST Rule 33 allows exclusion of expenditure or costs incurred by a supplier as a pure agent of the recipient only when specified conditions are satisfied. The supplier must act as a pure agent, pay a third party on authorisation of the recipient, separately indicate the amount on the invoice, and procure those supplies in addition to the supplier’s own service.
| Condition | Practical evidence | Risk if missing |
|---|---|---|
| Contractual authorisation | Agreement/engagement letter says supplier acts as pure agent for specific costs. | Recovery may be treated as part of taxable value. |
| Payment to third party on behalf of recipient | Third-party invoice/receipt and payment proof. | Looks like supplier’s own input cost. |
| Separate indication in invoice | Reimbursement line shown separately from service fee. | Harder to prove exclusion. |
| No title/use for own interest | Supplier does not consume the goods/services for itself. | Pure-agent argument weakens. |
If the position is pure agent, the invoice should show professional fee and pure-agent recovery separately, with supporting attachments. If the condition is not met, avoid artificially excluding it; valuation under Section 15 may require inclusion in taxable value.
This draft uses official GST law, rules, GST Council, CBIC/GST portal and government-source material only. Before publishing, re-check whether any notification, circular, rule text or portal workflow has changed after the draft date.