Petroleum Dealer Margins Taxable Under GST as Supply of Service; Discounts Clause Not Applicable; 18% Tax Rate Applied.

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....The differential dealer margin provided by the petroleum companies to its retail dealers is considered a taxable supply of service under GST. The amount paid as differential dealer margin is a consideration received for agreeing to the obligation to refrain from an act, which falls under clause (e) of Sl No. 5 of Schedule II of the CGST Act, 2017, and is therefore taxable to GST. Section 15(3) of the Act, which deals with the taxability of discounts, is not applicable in this case. The service of "Agreeing to refrain from doing an act" is classified u/s 9, Heading 9997, Service Code (Tariff): 999793 of the Scheme of Classification of Services, and is taxable at 18% as per Sl. No. 35 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time. The circular 29/2019 cannot be cited as a reason for non-payment of tax by the applicant.....