Home Case Index All Cases GST GST + AAR GST - 2021 (11) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 149 - AAR - GSTClassification of services - supply of manpower services to his clients on daily/ monthly basis for different jobs as required by his clients - pure agent services as defined in Explanation to Rule 33 of the CGST Rules, 2017 - exclusion of payment of salary/wages by the supplier from the value of supply for the purpose of section 15 of the CGST Act, 2017 - HELD THAT:- The applicant supplies manpower services for which he enters into an agreement with the recipient of services. It is submitted that the recipient of services authorizes the applicant to make payment of salary, wages and all allowances on behalf of him thereby the applicant makes such payment in the capacity of an agent of the service recipient. Further, payment of salary, wages and allowances made by the applicant is clearly and separately shown in the invoice raised by the applicant. For the purpose of supplying manpower services as per requirement of his clients, the applicant also enters into ‘Employment Agreement’ with different work-men specifying the terms and conditions to be followed by the work-men and the wages/salary to be paid against services provided by them - the applicant maintains ‘Register of Wages’ in Form XVII under rule 78(1) (i) of the Contract Labour (Regulation and Abolition) Central Rules, 1971 in respect of such supply of work-men. The applicant thus engages contract labour towards supply of manpower services as requited by his clients (recipient of services). Rule 33 of the CGST/WBGST Rules, 2017 clearly speaks that one of the conditions that has to be satisfied for exclusion of expenditure or costs from the value of supply which has been incurred by a supplier as a pure agent if the services procured by the service provider, as a pure agent of the recipient of service, from the third party are in addition to the services which he provides on his own account - Admittedly, in the instant case, the applicant first enters into an agreement to his client for supplying of manpower services and subsequently engages different work-men (third party) at the place of business of his clients and thereby supplies manpower services only. It is found that no other services other than manpower services are provided by the applicant to his client. In the instant case, undisputedly the applicant is the person who is liable to pay salary/wages to the work-men employed by him under ‘Employment Agreement’ to provide manpower services to his clients and just showing such amount in a separate manner in the invoice doesn’t shift his liability on the recipient of services and makes him qualify as a ‘pure agent’ in terms of rule 33 of the CGST/WBGST Rules, 2017 - The contention of the applicant that the recipient of services authorizes him to make payment of salary, wages and all allowances on behalf of him doesn’t hold water on the same ground that such amount is actually payable by the applicant himself - the argument that the applicant makes payment of such amount “on behalf of” his client i.e., the service recipient, cannot be accepted.
|