Pure Agent Valuation under GST (2026): Excluding Reimbursements under Rule 33
CA Meet Dhrangadhariya 
May 25, 2026
CA Meet Dhrangadhariya May 25, 2026
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Last updated: 24 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP
Quick summary
Professionals who pay a statutory fee or a third-party cost on a client’s behalf, then recover it on the invoice, need to know whether that recovery is taxed again as part of their own fee - this is exactly what the pure agent valuation rule decides.
Under GST, a person is a pure agent where all of the following hold:
A practising Chartered Accountant incorporating a private limited company on behalf of a client, and separately recovering the statutory registration fees paid to the Registrar of Companies, is the standard illustration.
A “principal,” in this context, is the person on whose behalf an agent carries on the business of supplying or receiving goods or services.
Rule 33 of the CGST Rules excludes a pure agent’s reimbursed expenditure from the taxable value of their own supply, provided all of the following eight conditions are satisfied:
A corporate services firm handles the legal work for incorporating a client’s company. In addition to its own service fee, it recovers the Registrar of Companies’ registration fee and name-approval fee, which are statutory charges payable by the client. Since the fee is compulsorily levied on the client, the firm is merely acting as a pure agent in making that payment - the recovery of this exact amount is a disbursement, not part of the value of the firm’s own supply, so it does not attract GST at the firm’s hands.
Because all eight conditions must be satisfied together, a single slip - adding even a modest margin to the recovered amount, clubbing it into the overall fee instead of itemising it separately, or the recipient not actually being the one liable to the third party - removes the exclusion entirely. The whole amount then becomes part of the taxable value of the agent’s own supply, and GST applies to it along with the service fee.
Structuring invoices correctly so that genuine reimbursements qualify for pure agent treatment, rather than being taxed as part of the fee, is a routine but easy-to-get-wrong area for professional service firms - please reach out to our team and we will be happy to assist with invoicing and GST valuation.
| Term | What it means |
|---|---|
| Pure agent | A person who pays a third party on a client’s behalf, under a contract, without taking any benefit or mark-up, and recovers only the exact amount spent. |
| Principal | The person on whose behalf an agent carries out a supply or receipt of goods or services. |
| Disbursement | A cost paid on someone else’s behalf and recovered exactly, as distinct from a fee charged for one’s own service. |
| Value of supply | The amount on which GST is charged, generally the transaction value under section 15, subject to specific valuation rules such as Rule 33. |
| Mark-up | Any amount added over and above the actual cost incurred, which would disqualify a recovery from pure agent treatment. |
A person who, under a contract with the recipient, incurs expenditure or costs on the recipient’s behalf while supplying goods or services - without holding title to what is procured, without using it for their own benefit, and recovering only the exact amount spent, with no mark-up.
Because Rule 33 of the CGST Rules lets a supplier exclude a genuine pure-agent reimbursement from the value of its own supply - so GST is charged only on the supplier’s actual service fee, not again on an amount already taxed, or exempt, when the third party supplied it.
All eight conditions in Rule 33 must be satisfied together: the contract for the procured supply must be between the third party and the recipient; the recipient must be the sole user of what was procured; the recipient must be liable to pay the third party; the recipient must authorise the agent to pay on its behalf; the recipient must know the services are from the third party; the payment must be shown separately on the agent’s invoice; the agent must recover only the exact amount paid; and the procured supply must be in addition to the agent’s own supply.
A Chartered Accountant or Company Secretary incorporating a company for a client and separately recovering the Registrar of Companies’ statutory filing and name-approval fees, paid on the client’s behalf, without any mark-up.
The exclusion under Rule 33 no longer applies to that amount - once any mark-up is added, or the amount is not shown separately, the whole recovered sum is treated as part of the taxable value of the agent’s own supply.
This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.
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