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TMI Blog2021 (11) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be engaged in supplying manpower services to his clients on daily/ monthly basis for different jobs as required by his clients. 1.3 It is submitted by the applicant that the clients also authorize him to make payment of salary/wages on monthly basis to the manpower provided by him. 1.4 The applicant submits that he raises periodical invoices to his clients indicating salary/ wages payable against the manpower services supplied by him and also indicates the service charges payable to him at the agreed rates in the invoices in a separate manner. 1.5 The applicant submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 1971 for the period July 2021 in respect of Principal Employer being the said client. * Print out of 'electronic challan cum return (ECR) under Employee's Provident Fund. 2.5 Terms and conditions as per the 'Manpower Supply Agreement' is found to be as under: * Whereas the client will employ the service provider on as and when basis whenever the company will have sufficient order in hand and in that event the Service Provider shall be required to supply manpower as required. The manpower will be provided at Premises Plot No. 1655, Zone-9, KLC, Bantala, South 24 Parganas, Pin-743502 and/or any other premises as and when mutually decided. * The service Provider enters into this agreement on clear understanding that the number of employees to be supplied by him will vary frequently because of uncertain and varying quantum of jobs available. * In addition to the services of manpower supply being rendered by the contractor, the principal hereby authorizes the Contractor to make payment of salary, wages and all allowances on behalf of the Principal, in the capacity of an agent of the Principal. * The payment of salary, wages and allowances made by the Contractor on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediately be sent back to Service Provider. * The personnel provided by Service Provider would be interviewed by the officials of Client before they are hired. * The Service Provider shall not disclose to any one regarding the information, formulae of the company adversely affecting the interest of the Company. * In the event of any dispute/grievance arising out of this contract of agreement between the two parties the same would be mutually discussed and settled failing which it shall be referred to arbitration of a mutually agreed Arbitrator under the provision of Conciliation and Arbitration Act. The venue of arbitration shall be at Kolkata and Arbitrator's decision shall be final and binding on the both the parties. * The contract may be terminated fully or partially by either of the parties with a month notice. 2.6 The applicant, upon furnishing of the aforesaid documents, has contended that he qualifies as a pure agent as defined in Rule 33 of the CGST Rules, 2017. Accordingly, the amount of salary/ wages to be paid by the applicant on behalf of the client is eligible to be excluded from the value of supply. The applicant is liable to pay tax only on the value of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that he is engaged in supplying manpower services to his clients on daily/ monthly basis for different jobs as required by his clients The issue involved in the instant case is to decide whether the applicant can be regarded as 'pure agent' of his client who receives such supply and whether value of supply of services in case of pure agent as prescribed in rule 33 of the CGST/ WBGST Rules, 2017 is applicable in the instant case. 4.3 With a view to appreciate the submissions urged before us, we find it apposite to go through rule 33 of the CGST/ WBGST Rules, 2017 first which reads as under: "33. Value of supply of services in case of pure agent. - Notwithstanding anything contained in the provisions of this Chapter, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely :- (i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorization by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. We also find that the applicant maintains 'Register of Wages' in Form XVII under rule 78(1) (i) of the Contract Labour (Regulation and Abolition) Central Rules, 1971 in respect of such supply of work-men. 4.6 Section 78 of The Contract Labour (Regulation and Abolition) Central Rules, 1971, as we find it relevant in this regard, thus reproduced herein under: 78. Muster Roll, Wages Registers, Deduction Register and Overtime Register. - (1) (a) Every contractor shall in respect of each work on which he engages contract labour,- (i) maintain a Muster Roll and a Register of Wages in Form XVI and Form XVII respectively: Provided that a combined Register of Wage-cum-Muster Roll in Form XVIII shall be maintained by the contractor where the wage period is a Fortnight or less; (ii) maintain a Register of Deduction for damage or loss, Register of Fines and Register of Advances in Form XX, Form XXI and Form XXII respectively; (iii) maintain a Register of Overtime in Form XXIII recording therein the number of hours of, and wages paid for, overtime work, if any; (b) Every contractor shall, where the wage period is one week or more, issue wage slips in Form XIX, to the workmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of his clients and thereby supplies manpower services only. We therefore find no other services other than manpower services are provided by the applicant to his client. We further find that by virtue of the "Employment Agreement' made between the applicant (service provider) and work-man (third party), the applicant, being the employer is liable to make payment to the third party (work-men/employee). 4.8 We are now going to analyse the activities involved in the instant case in the light of illustration given in rule 33 of the CGST/WBGST Rules, 2017. What is most significant in the said illustration that the service provider 'A', other than his service fee, recovers from the service recipient 'B" an amount towards registration fee and approval fee paid by him to the Registrar of Companies which he has paid for the name of the company i.e, 'B". Such fees are compulsorily levied on 'B' and therefore also payable by 'B'. Here, 'A' is merely acting as a pure agent in the payment of those fees and for that reason, recovery of such expenses is a disbursement and shall not form a part of the value of supply. 4.9 In the instant case, undisputedly the applicant is the person who is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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