Pure agent under GST: when reimbursements are not taxable

Conditions in Rule 33

Rule 33 of the CGST Rules allows expenditure incurred as a pure agent to be excluded from value only if all of these conditions are met:

• There is a contractual agreement under which the supplier acts as pure agent of the recipient for the payment.
• The supplier neither intends to hold nor holds title to the goods or services procured.
• The supplier does not use those goods or services for its own interest.
• The recipient receives the goods or services procured.
• The payment is separately shown in the invoice.
• Only the actual amount incurred is recovered.
• The procured supplies are in addition to the supplier's own services.

Practical examples

A consultant paying a government fee in the client's name, or a customs broker paying port charges and duty on the importer's behalf, can often qualify. Travel and hotel costs of the consultant's own staff usually do not, because they are used to provide the consultant's own service and so form part of its value.

Getting it right

Put the pure agent arrangement in your engagement letter, keep the third-party invoice in the client's name where possible, and show the reimbursement on a separate line without tax. Do not take input tax credit on the expense. Auditors and officers often reclassify reimbursements as taxable when the paperwork is weak.

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This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.