The Authority of Advance Ruling (AAR), Gujarat Bench held that 18% Goods and Service Tax (GST) applicable on supply of labour services.The applicant, M/s. BhadreshKumar Rameshchandra Dave is a service provider and intends to work as a Pure Agent for a company which will be the recipient of the labour supply services satisfying various conditions. Firstly, the applicant intend to work as a pure agent of the company that will be the recipient of the labour supply service, they will make the payment to the third parties (labour) for the labour supply service procured, as the contract for labour service made by the third parties is between third party and the company that will receive the service. Secondly, the company that will receive labour supply service uses the services so procured by the applicant in their capacity as a pure agent of the company receiving the supply.Thirdly, the company receiving labour supply service is liable to make payment to third parties (labour).Fourthly, the company authorizes the applicant (pure agent) to make payment on their behalf.Fifthly, the company which is recipient of supply knows that the labour services for which payment has been made by the applicant shall be provided by the third parties (labour) Sixthly, the payment made by the applicant on behalf of the Company which is recipient of labour supply services has been separately indicated in the invoice issued by the applicant to the recipient of the service; applicant will issue two separate invoices. Seventhly, the applicant recover from the company which is recipient of labor supply service only such amount that has been paid by them to the third parties (labour); and Eightly, the labour service procured by applicant from the third parties as a pure agent of the company which is recipient of labor supply service are in addition to the services applicant provide on their own account. The applicant sought advance ruling in respect of the GST rate for the activity carried out by the applicant. The Coram consisting of Sanjay Saxena and Mohit Aggarwal observed that the applicant does not satisfy any one of the conditions mentioned in the Rule 33 of CGST Rules, 2017 which are required for acting as a “pure agent” Therefore, the AAR concludes that the applicant cannot be categorized as a “pure agent” as such he is engaged in the supply of labour service. The supply of labour service is taxable under GST Act/Rules, therefore applicant is liable to pay 18% GST on the supply of said service provided.