Illustration
- Illustration.– Corporate service firm A is engaged to handle the legal work pertaining to the incorporation of Company B. Other than its service fees, A also recovers from B, registration fee and approval fee for the name of the company paid to the Registrar of Companies.
- The fees charged by the Registrar of Companies for the registration and approval of the name are compulsorily levied on B. A is merely acting as a pure agent in the payment of those fees.
- Therefore, A’s recovery of such expenses is a disbursement and not part of the value of supply made by A to B.