whether operating a petrol pump will be taxable

[Asked by Guest]

Sir, my client is primarily a gta service provider in Maharashtra, whereas he is also running a petrol pump owned by a third person in Goa. Further, as per agreement for running the petrol pump my client will be entitled for all profits received from the operation of the petrol pump after incurring all expenses and in return my client will pay ownership fee to the owner of the petrol pump

My question is, whether the profit earned as per the agreement will be taxable for gst and if, yes, than which SAC will apply.

[Shilpi Jain]

This could be liable under GST being business support services. However, the difference could be the way in which the agreement is drafted which would indicate what the arrangement is actually. If major part of the amount received can be shown to be towards reimbursements, those amounts can be kept out of taxable value.

[KASTURI SETHI]

Sh.Anand Sable Ji,

You may call it ownership fee but two services are involved. These are :

1. Renting of immovable property;

2. Hiring, Leasing, Licensing of Goods (Supply of Tangible Goods).

Go through the definition of both services. GST is applicable.

[Ganeshan Kalyani]

I agree with the views of Sri Kasturi Sir. I would amount to renting of immovable property.

AI Summary

GST liability on revenue share from petrol pump operations: treated as consideration for taxable services, including rent or lease.
Receipts retained by a contractor operating a petrol pump under an agreement that grants operational rights in return for payments to the owner constitute consideration for services and are taxable under GST unless specifically shown to be reimbursements. The taxable classification depends on contract terms and may fall under Renting of Immovable Property, Hiring, Leasing, Licensing of Goods, or business support services; clear drafting and allocation determine which SAC applies and what amounts can be excluded from taxable value.