TaxTMI 
TaxTMI 
2024 (10) TMI 443
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Goods and Service Tax Act, 2017. His place of business is 1st Floor, Shop No. 72, Avdhoot Mandal, Haridwar, Uttarakhand. 3) A proposed draft agreement (Annexure-2 to the writ petition) was entered between the petitioner and the service recipient. The salient features of the proposed draft agreement are as under : "(i) Scope: - Petitioner will transport the goods belonging to the service recipient from its factory to the specified destination within in a specified period (reasonable) of time taking specified route. Petitioner will be assuming transit risk of the goods being transported. (ii) Exclusivity:- The vehicle, deployed by the petitioner, shall exclusively transport the goods belonging to the service recipient for the trip, i.e., the vehicle deployed by the petitioner for the particular trip cannot transport the goods for any other person. (iii) Consignment Note: - Petitioner will issue consignment note, serially numbered, signifying the receipt of goods from service recipient for the purposes of transportation. The consignment note, inter alia, will contain details of the date of consignment note, registration number of the goods carriage depl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....023, the learned Appellate Authority for Advance Ruling Uttarakhand upheld the earlier order dated 26.09.2022, passed by Goods and Service Tax Advance Ruling Authority Uttarakhand by observing as under : "The value of diesel supplied / filled by the service recipient in the vehicle(s) provided by the applicant will form part of the value of GTA service and the same will attract GST in terms of Section 15 of the CGST Act, 2017 and Uttarakhand Goods and Service Tax Act, 2017." 7) The petitioner has come up in appeal against the above said order. 8) The petitioner has referred to Section 7(1)(a) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act, 2017). The same is reproduced as under : "7. Scope of supply.- (1) For the purposes of this Act, the expression ―supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; 9) As per above said section, the supply includes all forms of supply of goods or services made or agreed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both." 13) As per Section 15 (2) (b) of the CGST Act, 2017, there has to be a contract or one has to enter into contract or be a part of contract in some capacity as to who is liable to pay for the supply of fuel. As per the agreement (Annexure-2), the liability to pay for the cost of the fuel was never on the petitioner-transporter. He was only to be paid freight charges under the GTA Rules 2017, and in this backdrop, the cost of fuel could not be added as per Section 15 (2) (b) of the CGST Act, 2017. Since as per the agreement (Annexure-2) the fuel "has to be procured and to be supplied by the service recipient to the petitioner, the value of fuel cannot be added to the value of freight charges charged by the petitioner". 14) Section 2(31) of the CGST Act, 2017 defines "consideration" as under : ``"Consideration" in relation to the supply of goods or services or both includes - (a) any payment made or to be made, whether in money or otherwise, in respec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AAR Karnataka in In Re: M/s Hical Technologies Pvt. Ltd. [2019 (10) TMI 571 - Authority for Advance Ruling, Karanataka]; AAAR Karnataka in In Re: M/s Nash Industries (I) Pvt. Ltd. [2019 (3) TMI 435 - Appellate Authority for Advance Ruling, Karnataka] and AAR Maharashtra in In Re M/s Lear Automotive India Private Limited [2018 (12) TMI 766 - Authority for Advance Ruling, Maharashtra]. 19) In all the above said judgments it has been consistently held that value of diesel filled free of cost (FOC) by the service recipient is not includable in the value of GTA service proposed to be provided by the applicant. It is further stated that the petitioner has paid the GST as a transporter, and the whole of it is allowable as credit to the recipient of service as input tax credit (ITC) under Section 16 of the CGST Act, 2017. Such ITC is usable by the recipient of service for payment of its own GST on the supplies made by it. There will be no financial impact on the recipient of service, and even for the exchequer there will be no financial impact since whole of the GST paid by the petitioner-transporter on freight will be allowable as ITC to the recipient and such credit is then utilizable....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ansaction value yet it has been specially mandated that any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both shall be included in the value of the supply. As per Section 15 (2) (b) all ingredients of a supply are required to be looked into while arriving at the value of a particular supply. The claims of the petitioner have been rightly rejected on the grounds that the GTA includes 'transport of goods by road' and 'issuance of consignment note' and the essential ingredients in the transport of goods and issuance of consignment note would be the presence of the goods for the purpose of transporting them plus the provision of a movable vehicle, the presence of a driver to drive the vehicle, fuel for the vehicle and such other assets / services, taken as a whole and at the same time and together, to meet the requirements of the service. The transportation of goods cannot take place by providing a static asset, whether on rent or otherwise. It also cannot take place simply by hiring out or renting of a movable asset (suc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vice recipient. The Supreme Court in para 12 of the above said judgment has observed as under : "12. On a reading of the above definition, it is clear that both prior and after amendment, the value on which service tax is payable has to satisfy the following ingredients : (a) Service tax is payable on the gross amount charged - the words "gross amount" only refers to the entire contract value between the service provider and the service recipient. The word "gross" is only meant to indicate that it is the total amount charged without deduction of any expenses. Merely by use of the word "gross" the Department does not get any jurisdiction to go beyond the contract value to arrive at the value of taxable services. Further, by the use of the word "charged", it is clear that the same refers to the amount billed by the service provider to the service receiver. Therefore, in terms of Section 67, unless an amount is charged by the service provider to the service recipient, it does not enter into the equation for determining the value on which service tax is payable. (b) The amount charged should be for "for such service provided" - Section 67 clearly indicates....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider "for such service" and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service." 25) Finally, the Supreme Court in the above said judgment has held that the value of free supplies of diesel and explosives in respect of service of "Site Formation and Clearance Service" can be included for the purpose of assessment to service tax under Section 67 of the Act. The Supreme Court further held that the value of such material which is supplied free by the service recipient cannot be treated as "gross amount charged" and it is not the consideration for rendering the services. In this backdrop, the value of free supplies of diesel and explosives would not warrant inclusion while arriving at the gross amount charged on the service tax to be paid, and all the appeals filed by the Union of India were dismissed. 26) The Supreme Court in the judgments referred to hereinabove has consistently held that where diesel is filled free of cost ....