GST on visa fees: the pure agent rule most agents get wrong
Embassy and VFS fees you recover at cost carry no GST, but your service charge does, at 18%. Here's the invoice format that keeps you compliant.
Khardung La · 05:50A client asks you to handle their Dubai visa. You pay VFS ₹6,500, charge them ₹8,000 flat, and move on. Simple, until your CA asks why you didn't charge GST on the ₹6,500, or why you charged GST on all ₹8,000 when you shouldn't have.
This is the single most common billing doubt for agencies that do visa work alongside packages: do I charge GST on VFS fees, or just on my service charge? The short answer is that the embassy or consular fee, recovered at actual cost, carries no GST at all. Your facilitation or service charge, the amount you keep, is taxable at 18%. Government and consular fees for visa or passport recovered at actual cost as a pure agent attract no GST; the agent's service or facilitation charge is taxable at 18%.
Get this wrong and you're either overcharging your client on tax you didn't need to collect, or undercharging and quietly eating an 18% liability out of your own margin. Both are avoidable with one invoice change.
What the "pure agent" rule actually covers
Under GST law, you act as a pure agent when you pay a third party (here, the embassy or VFS) on your client's behalf, and simply pass that cost through without adding anything to it. The government fee was never really "your" supply; you were just the payment channel. Because of that, it sits outside the value of your supply and doesn't attract GST.
Your service charge is different. That's the fee for the work you actually did: checking documents, filling forms, tracking the application, following up with VFS. That is a genuine supply of service, and it's taxed like any other service you sell: 18% GST, same slab that applies to most agency facilitation fees. This is the standard rate to reference on your GST rate card alongside your package invoicing rates.
The two conditions Rule 33 sets
The pure agent exclusion isn't automatic just because you call it a "reimbursement" on the invoice. Rule 33 of the CGST Rules sets out the conditions for excluding a pure agent's costs from the value of supply: the payment must be shown separately on the invoice. Critically, you must recover the exact amount paid, with no markup.
That last condition trips up most agents. If VFS charges ₹6,500 and you bill the client ₹7,000 "to round it off" or "to cover the courier," that entire ₹7,000 line loses its pure-agent status. You've now added value to it, which means GST applies to the whole amount, not just your markup. The moment you touch the embassy fee figure, it stops being a pass-through.
Practically, this means:
- Bill the exact amount the embassy or VFS charged, down to the rupee.
- Show it as its own line, separate from your service charge.
- Keep the VFS receipt or embassy payment confirmation on file. It's your evidence that the amount was recovered at actual cost, not estimated.
Careful: "Approximate" visa fee lines are a common shortcut when embassy fees fluctuate slightly by cash rate or processing tier. Don't do it. An approximate figure isn't a pure-agent reimbursement under Rule 33. It's a service charge in disguise, and it can pull the entire visa line into the 18% bracket during a GST audit.
The invoice format: two line items, not one
The fix is one line of invoice discipline, the kind GST-compliant invoicing software built for travel agencies enforces by default: never combine the embassy fee and your service charge into a single amount. Split them, every time.
| Line item | Amount | GST |
|---|---|---|
| Embassy/VFS visa fee (actual, pass-through) | ₹6,500 | Nil |
| Visa facilitation/service charge | ₹1,500 | 18% |
| GST on service charge | Not applicable | ₹270 |
| Total payable by client | ₹8,270 |
The embassy fee row carries no tax because it meets the Rule 33 test: paid at actual cost, authorised by the client, shown separately. The service charge row is your revenue, and it's taxed exactly like any other consulting or facilitation fee you invoice. This is the same logic that decides whether a package invoice line should sit at 5% or 18%. The split matters more than the label.
Example: Your agency processes a Dubai tourist visa. VFS charges ₹6,500 for the embassy fee. You quote the client ₹1,500 as your service charge for form-filling, appointment booking and document checks. GST at 18% applies only to the ₹1,500 service charge: ₹1,500 × 18% = ₹270. The client's total bill is ₹6,500 + ₹1,500 + ₹270 = ₹8,270, not 18% on the full ₹8,000, which would have added an extra ₹1,440 in tax that was never owed.
What happens if you lump it together
If you invoice a single number (say, "Visa processing charges: ₹8,000") with no split, you no longer have a documented pure-agent pass-through. The whole ₹8,000 is now treated as your fee for a service, and GST applies to all of it at 18%: ₹1,440, not ₹270. That's ₹1,170 more tax collected from the client than the correct invoice requires, or eaten out of your margin if you'd quoted a flat price and didn't gross up for it.
It cuts the other way too. Some agents, worried about the paperwork, skip charging GST on the service charge altogether. They treat the whole amount as a "reimbursement," which understates your output tax liability and is exactly the kind of gap a GST notice is built to catch, since your bank credits won't match your reported taxable turnover.
There's a genuine upside to keeping the split clean beyond avoiding a notice: where you outsource the visa facilitation itself to another agent charging you 18% GST, you can claim input tax credit on that cost, which only works cleanly if your own invoicing separates the pure-agent pass-through from the taxable service in the first place. Muddle the two and your ITC trail gets muddled with it.
Common questions
Do I charge GST on VFS fees specifically?
No. VFS centres collect the visa fee on behalf of the embassy; when you pass that exact amount to your client without markup, it qualifies as a pure-agent reimbursement and carries no GST. Only your own facilitation charge is taxed.
What if I don't know the exact embassy fee in advance?
Quote your service charge separately and settle the exact embassy fee line once you've actually paid it and have the receipt. Don't invoice an estimate as the "actual" pure-agent amount. True it up before finalising the bill.
Does this apply to passport services too, or only visas?
The same logic applies. If you're recovering a passport application fee or a courier/tatkal fee paid to a government authority at actual cost, it's excluded the same way: separately billed, at cost, with your handling charge taxed at 18% on top.
Can I add a small handling buffer to the embassy fee line to cover currency or bank charges?
Not on that line. Any amount above the exact third-party fee turns the whole line into taxable value. If you want to recover bank or forex charges, add them as their own labelled line item taxed at 18%, not folded into the embassy fee.
The short version
- Embassy/VFS/consular fees recovered at the exact amount paid, with no markup, carry no GST: this is the pure-agent exclusion.
- Your service or facilitation charge for the visa work itself is taxable at 18%, same as most agency service fees.
- Rule 33 sets two tests: exact recovery (no markup) and a separate invoice line. Miss either and the exclusion doesn't apply.
- Never combine the two amounts into a single invoice line; it converts the whole thing into taxable value.
- ITC on outsourced visa-facilitation services only flows cleanly if your own invoice keeps the pass-through and the service charge apart.
- As of July 2026, this is the working practice reported by tax advisories; rules change, so confirm your invoice format with your CA before you standardise it.