The Uttrakhand bench of Authority for Advance Ruling (AAR) ruled that the service providers of tours and travels should charge Goods and Services Tax (GST) on the whole amount of the bill including monthly rent, night charges and fuel used on the motor vehicle on mileage basis.
The bench of Anurag Mishra and Rameshvar Meena observed that all the considerations including reimbursement of any kind shall form part of the value of supply in view of Section 15 of the Central Goods and Services Tax Act, 2017.
The applicant M/s Uttarakhand Public Financial Management Project, is in receipt of motor vehicle hired service including fuel charges from service providers M/s Baba Tour & Travel and M/s Rajeshwari Travels.
M/s Baba Tour & Travel Services, charges GST @ 5% on the whole amount of bill which includes monthly rental, night charges and fuel on mileage basis whereas M/s Rajeshwari Travel, charges GST @ 5% only on monthly rent component of the bill and no other charges are included for charging GST.
In view of the above facts, ‘the applicant’ sought advance ruling as to whether the “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).
The AAR observed that without the 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 do not happen. The motor vehicle hire services have the integral component of running/ operating the vehicle to one place to another for transportation.
Ms. Gurbhagat Kaur and Sh. Rahul Kumar Jha, Authorised Representative, on behalf of the applicant appeared for personal hearing on the said date and reiterated the submission already made in their application.
The bench observed that it has been specifically mandated that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier.
Furthermore, the value of supply also includes any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both
The AAR added that the provisions of the Section 15 of the Central Goods and Services Tax are very clear and in unambiguous terms it has been mandated that any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
