CESTAT, Mumbai has held that when services are procured for use by several group companies, Valuation Rules do not stipulate any condition as to one on one identification of service recipient and service provider in order to fall within the ambit of 'Pure Agent'.
In the instant case, the assessee procured various services for use by group companies as part of cost sharing agreement. The assessee had no function other than to act as trustee or manager of the group companies and did not avail any services by itself.
The cost incurred by the assessee was reimbursed on actuals by the participating group companies. It was held that activity of incurring cost towards procurement of services and reimbursement therefore was not in the nature of outsourced activity as per the definition of Business Support Service as it stood during relevant period and therefore, the appellant was not liable to service tax.
Tribunal in its order in the case of Reliance ADA group P Ltd v. CST, took note of the fact that the appellant did not provide any service but only procured services for use by group companies.