Concept of Pure agent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 May 2011 dear sir

my company is registered with service tax under Work contract services.Say A limited
(Turnkey Interior Designing and contract execution Company)

Company procured material from its one of the sister concern which is registered under excise act, 1944 and engaged in production of moduler and furniture.Say B Limited.

One Client C, Approached to A limited to provide moduler and furniture.

Entire M&F procured is being procured from B limited only.

A limited did not provide any service or material from his own Account.

As a Limited is registered under WCT,2007 it can not claim any cenvat credit.

with the reference of above example, my company seek your advise ,

1. Can A limited act as Pure agent?
2. if yes, what are the preconditions?

Thanks in advace for your valuable advise in this regards

CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)
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23 May 2011 If A ltd has not provided any service or materials, then what is the role of A ltd with respect to the contract.

Querist : Anonymous

Querist : Anonymous (Querist)

24 May 2011 Goodwill of A Limited

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Querist : Anonymous

Querist : Anonymous (Querist)

24 May 2011 and A limited will ensure quality and inspection of service.

CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)
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25 May 2011 Pure agent is a person providing taxable services who incurs certain expenditure on behalf of the service receiver. There shall be agreement between the parties providing that primary responsibility to incur the expenditure is with the service receiver but provider pays the amount as an agent. Also the service provider shall not gain any thing from this arrangement.