TN AAR: GST Levy on Refundable Toll Charges, Part of Value of Supply

The Tamil Nadu Authority for Advance Ruling ( AAR ) has ruled that reimbursement of toll charges is subject to include in the value of supply and is taxable under GST Act.

The applicant, NTL India Private Limited is involved in furnishing the services like rental services of road vehicles including buses, coaches, cars, and other motor vehicles, with the operator categorized beneath HSN Code 996601 along with the additional transport services classified beneath HSN Code 996799 and are releasing GST at suitable rates.

The information regarding the activity of renting services (996601) was submitted via the petitioner however not able to submit the information of the activities that come beneath SAC 996799.

Moreover the same would be specified that they were entering into a contract through their customers to take the points and drop them in their office premises towards which they would raise the invoices every month and release the tax as per that and toll charges on various locations would be returned through their customers through showing the toll charges respectively in the raised invoices.

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The exemption under Notification No. 12/2017-CT (rate) on 28.06.2017 was available to the service provider only excluding the service receivers. The cost of toll charges that are furnished via the petitioner and later reimbursed through their customers must be engaged in the supply value and the tax would be liable to pay the relevant rate on the whole supply value along with the toll charges furnished. 

Shri T G Venkatesh, I.R.S., Additional Commissioner and Smt. K Latha Joint Commissioner stated that the petitioner would be the service provider of transportation services to its customers and the reimbursed toll charges must be contained in the supply value and tax is to be furnished at the relevant rates on the complete supply value.