Appellate Authority upholds ruling on transportation services and bus pass value inclusion.

The Appellate Authority upheld the Advance Ruling, determining that the Appellant is not acting as a mere intermediary but is providing transportation services independently. Additionally, the value of the bus passes distributed by the Appellant must be included in the total value of the facilitation charges as per Section 15 of the CGST Act. The appeal filed by the Appellant was dismissed in its entirety.

---

---

Issues Involved:
1. Whether the supply of service by the Appellant to the commuters is a facilitation of transport service by BMTC to the commuters.
2. Whether the value of the bus passes distributed by the Appellant to the commuters is to be included in the value of the facilitation charges.

Detailed Analysis:

Issue 1: Facilitation of Transport Service
The Appellant has entered into an agreement with BMTC to provide transportation for employees of the corporate clients in the Tech Park. The agreement stipulates that BMTC will provide buses and bus passes to the Appellant, who in turn distributes these passes to the commuters. The Appellant argued that they merely facilitate the transportation service between BMTC and the commuters, acting as an intermediary.

However, the judgment clarifies that there are two distinct transactions:
1. BMTC provides buses and bus passes to the Appellant.
2. The Appellant issues bus passes to the commuters and schedules the bus routes.

The recipient of BMTC's service is the Appellant, who pays for the service. The commuters are beneficiaries but not recipients of BMTC's service. The judgment references the case of Verizon Communication India Pvt Ltd, emphasizing that the recipient is determined by the contractual agreement and the party responsible for payment. The Appellant is not an intermediary as they are not acting as an agent or broker for BMTC. Instead, they provide the transportation service on their own account, evidenced by the agreement and the issuance of bus passes by the Appellant.

Issue 2: Inclusion of Bus Pass Value in Facilitation Charges
The Appellant contended that the bus passes are actionable claims and should not be included in the value of facilitation charges. They argued that the bus pass is an acknowledgment of money received in advance for future services, constituting a debt.

The judgment refutes this by explaining that under GST law, actionable claims are defined narrowly and do not include bus passes. The bus pass is considered a contract of carriage, not an actionable claim. The value of the bus passes must be included in the value of the service provided by the Appellant as per Section 15 of the CGST Act. The bus passes are not vouchers but instruments accepted as consideration for transportation services. Therefore, the cost of the bus passes, along with the facilitation charges, forms the total value of the service provided by the Appellant.

Conclusion:
The Appellate Authority upheld the Advance Ruling, concluding that:
1. The Appellant is not merely facilitating the transport service but is providing it on their own account.
2. The value of the bus passes must be included in the value of the facilitation charges as per Section 15 of the CGST Act.

The appeal filed by the Appellant was dismissed on all counts.

---