Free-of-cost diesel supplied by the recipient is includible in GST value of mining support services under valuation rules.

Free-of-cost HSD oil supplied by the service recipient to a mining support service provider is included in the value of supply under GST. The ruling applies section 15(2)(b) on the basis that the diesel was an integral input for operating equipment and vehicles used for contract performance, and that amounts incurred by the recipient in relation to the supply but not included in the price form part of the taxable value. The supplied fuel was therefore treated as part of the consideration/value of the service.

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Issues: Whether HSD oil issued free of cost by the service recipient to the applicant is includible in the value of supply of service under section 15(2)(b) of the GST law.

Analysis: The applicant was engaged in mining support services and used diesel supplied by the service recipient for operating equipment and vehicles deployed for the contract. The relevant statutory framework on supply, value of supply, and consideration was examined. It was held that the diesel supplied by the recipient formed an important and integral component of the execution of the contract and that section 15(2)(b) brings into value any amount which the supplier is liable to pay in relation to the supply but which has been incurred by the recipient and not included in the price actually paid or payable. On that footing, the free-of-cost HSD supplied by the recipient was treated as part of the supply value.

Conclusion: HSD oil issued free of cost by the service recipient forms part of the value of supply of service by the applicant.

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