Valuation of supply— Section 15 of CGST Act— In the instant case, the applicant has sought Advance Ruling on the following questions:-
1. Whether the exemption of GST on the intra-state supply of services of description as specified against SI.No.23 in Col(3) of the Table to Notification No. 12/2017-CT(rate) dated 28.06.2017, Viz services by way of access to a road or a bridge on payment of toll charges falling under the heading 9967, from so much of the central tax leviable thereon under sub-section (1) of Section 9 of the said act, as amended is applicable to the applicant as well.
2. Whether the value of toll charges (which attracts NIL rate as pointed out in (i) above is liable to be included in the value of outward supply of service?
3. Whether the applicant is liable to pay tax on the toll charges also by adding to outward value of supply of service.
The supply of renting of road vehicles is carried out by the applicant to their clients and the toll charges incurred is an incidental expense incurred during the supply of such service. This incidental expense incurred by the applicant is being reimbursed separately by the recipient of service.
The applicant has contracted as a service provider principally performing the service of renting road vehicles in their individual capacity and not as agents of their clients. Hence the toll charges paid back are in the nature of reimbursement only and not disbursement.
the Applicant is a service provider of transportation services to their clients and the toll charges incurred by them and later reimbursed from the service recipients should be included in the value of supply and tax be paid at the appropriate rates on the entire value of supply.
Held that— The value of toll charges, being incidental expenses incurred while providing outward supply, is liable to be included in the value of outward supply of service provided by the applicant as per Section 15(3) of the CGST/TNGST Act, 2017.
Applicant is liable to pay tax on the toll charges also by adding to outward value of supply of service.