Manpower services provider can’t be treated as pure agent merely by showing wages and salaries separately in invoices: AAR

Case Details: Authority for Advance Rulings, West Bengal Prodip Nandi, In re - [2022] 134 taxmann.com 119 (AAR-WEST BENGAL)

Judiciary and Counsel Details

• • Brajesh Kumar Singh and Joyjit Banik, Member
  • Parag Kothari, Authorised Representative for the Applicant.

Facts of the Case

The applicant entered into agreement with client for supplying manpower services. Subsequently, it entered into Employment Agreement with different workmen specifying terms and conditions to be followed by them and wages/salary to be paid against services provided by them. It filed an application for advance ruling to determine, whether it would be treated a pure agent as defined in Explanation to rule 33 of the CGST Rules, 2017.

AAR Held

The Authority for Advance Ruling observed that the applicant raised periodical invoices on its client indicating salary/wages payable against manpower services supplied by it and also indicated service charges payable to it at agreed rates in invoices in a separate manner. However, as per the agreement, the applicant was a person who was alone liable to pay salary/wages to workmen employed and not making these payments on behalf of service recipient. Therefore, it was held that the applicant would not be treated a pure agent for its clients merely by showing wages and salaries separately in invoices issued to clients.