The Uttarakhand Authority of Advance Ruling (AAR) has held that GST is payable on monthly rental, night charges, and fuel on a mileage basis when availing of motor vehicle rental services.
M/S Uttarakhand Public Financial Management Project, the appellant is in receipt of motor vehicle hire service including fuel charges from service providers M/S Baba Tour & Travel and M/S Rajeshwari Travel.
While submitting a claim bill for a particular month, both service providers are using two different to calculate the leviable tax, wherein M/S Baba Tour & Travel Services is charging GST @ 5% (2.5 % SGST and 2.5% CGST) on the whole amount of bill (monthly rental + night charges + fuel on mileage basis), whereas M/S Rajeshwari Travel is charging GST @ 5% (2.5 % SGST and 2.5% CGST) only on monthly rent component of bill and no GST is charged on fuel charges.
The applicant sought to know whether the Service provider can charge GST on the whole amount of the bill (monthly rental + night charges + fuel on mileage basis) or only on monthly rental (excluding night charges + fuel on mileage basis).
It was evident that Section 15 of the CGST Act, 2017 mandates that the value of supply shall include among other things, any other amount that the supplier is liable to pay about such supply but which has been incurred by the recipient of the supply and not included in the price paid or payable for the goods or services or both.
A Coram comprising of Shri Anurag Mishra (Member) and Shri Rameshvar Meena (Member) has observed that without fuel the motor vehicle does not operate (run) and without running i.e. moving from one place to another, the act of motor vehicle hire services does not happen. Motor vehicle hire services have the integral component of running/ operating the vehicle from one place to another for transportation.
The AAR held that the service provider has to charge GST on the whole amount of the bill which in the instant case is monthly rental plus night charges and fuel on a mileage basis.
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