GST
Pure agent reimbursements under GST Rule 33: conditions, invoice and examples
A reimbursement is not automatically outside GST value. Rule 33 excludes third-party payments from taxable value only when the supplier acts as a pure agent and every condition is supported by documents.
Primary source trail
Use Rule 33 with the contract, invoice and third-party liability evidence. A narration line saying reimbursement is not enough.
Recipient liable
The recipient, not the supplier, must be liable to pay the third party.
Authorised agent
The supplier must make payment as authorised pure agent of the recipient.
Separate indication
The amount should be separately indicated and recovered at actuals.
No own use
The supplier should not use the goods or services for own interest beyond acting as agent.
Bare law and source decode
- GST value normally includes amounts charged by the supplier in relation to the supply.
- Rule 33 is a narrow exclusion and must be read condition-by-condition.
- Own business costs recovered from the customer are usually part of taxable value even if labelled reimbursement.
- Invoice presentation should show pure-agent amount separately and tie it to third-party documents.
- Contracts should authorise pure-agent payments before the expenditure is incurred.
Workflow
Read the contract and identify whether pure-agent authority exists.
Check who is legally liable to the third-party vendor or authority.
Match third-party invoice/challan, payment proof and recovery at actual cost.
Show pure-agent line separately on invoice and keep it out of taxable value only where all conditions are satisfied.
If any condition fails, include the amount in taxable value and tax it with the main supply as applicable.
Practical examples
- Statutory fee paid by a consultant on behalf of the client can qualify only if the client is liable and the consultant recovers actuals as authorised agent.
- Travel, courier or software costs used by the supplier to perform services are usually own costs, not pure-agent exclusions.
- A government fee challan in the client name is stronger evidence than a vendor invoice in the supplier's name.
Highlighted points
- Do not treat every reimbursement as non-taxable.
- Do not net off costs without invoice disclosure.
- Do not apply pure-agent treatment without written authority.
- Keep third-party payment proof with the GST invoice.
Exam and advisory case study
Exam case: A consultant charges professional fee plus travel and hotel cost. The hotel bill is in the consultant's name and the travel was used to deliver the service. That is not automatically a pure-agent exclusion.
Finin2min Summary
Rule 33 is documentation-heavy. The file should prove authority, recipient liability, actual recovery, separate invoice disclosure and no supplier self-use.
Q&A
Is reimbursement outside GST?
Only where Rule 33 conditions are met. Otherwise it forms part of taxable value.
Is separate invoice line enough?
No. It is necessary evidence but not a substitute for authority and liability tests.
What is the best evidence?
Contract clause, third-party document in recipient name, actual payment proof and exact recovery.
Related internal links
GST reimbursementsGST invoice requirementsGST services rate explorer
Educational material only. This is not legal, tax, financial, accounting, insurance or investment advice. Apply the official source, current portal record, contract and facts of the specific matter.