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Whether Pure Agent and Intermediary are the same under Service tax laws

Service Tax - Started By: - Sanketh Meri - Dated:- 24-9-2016 Last Replied Date:- 25-9-2016 - Dear All, Just wanted to know the difference between Pure agent under Rule 5(2) and Intermediary under POP Rule 2(F). If distinguished members can throw some light on this. Also, please let me know whether both are mutually exclusive or we can use it simultaneously at respective places. What i mean is can we draft an agreement between two parties where all the essence of both Pure agent and Intermediary .....

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rule 5 of Service Tax (Determination of Value) Rules, 2006, pure agent means a person who- (a) enters into a contractual agreement with the recipient of service to act as his pure agent to incur expenditure or costs in the course of providing taxable service; (b) neither intends to hold nor holds any title to the goods or services so procured or provided as pure agent of the recipient of service; (c) does not use such goods or services so procured; and (d) receives only the actual amount incurre .....

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ty on behalf of the receiver of the service whereas an intermediary is acting on behalf of the service receiver/provider on commission basis which includes his profit element. - Reply By YAGAY AND SUN - The Reply = There is a thin line of difference, which differentiates between the Pure Agent and the Intermediaries, and it is the line of profitability. - Reply By Ganeshan Kalyani - The Reply = Though the difference is clear the tough part is to convince the audit party. The documentation is utm .....

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be paid by the pure agent on behalf of the principal, rest are the secondary documents.Hence, PO/SO are important documents as these are also demanded by the Auditors at the time of conducting audits. - Reply By Ganeshan Kalyani - The Reply = PO may be for, say 500 quantity , but SRN (Service Receipt Note) would be for 490 quantity I.e. actual quantity receipt. Payment is made on actual basis and not on PO basis. Thus SRN and actual bills are essential. - Reply By YAGAY AND SUN - The Reply = Al .....

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