Amount recovered for fuel is to be included in value of aircraft rental services: AAR

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  • Last Updated on 13 January, 2022

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GST Valuation - Supply of aircraft rental services - Fuel cost reimbursed

Case Details: Appellate Authority for Advance Ruling, Gujarat Global Vectra Helicorp Ltd., In re - [2021] 133 taxmann.com 382 (AAAR-GUJARAT)

Judiciary and Counsel Details

    • J.P. Gupta and Seema Arora, Member
    • Neeraj Agrawal for the Appellant.

Facts of the Case

The appellant was providing rental services of aircraft including passenger aircrafts, freight aircrafts and like with or without operator. It entered into a contract with ONGC for supply of Helicopters classifiable under Service Accounting Code 9966 ‘Rental services of aircraft including passenger aircrafts, freight aircrafts and the like with or without operator’.

It sought Advance Ruling on question as to whether amount recovered as reimbursement (at actual) from the customer for the fuel procured on behalf of the customer to be included in the value of services provided. The Advance Ruling Authority held that amount recovered as reimbursement from for the fuel procured on behalf of the customer would be included in the value of services. It filed appeal against the order.

AAR Held

The Appellate Authority for Advance Ruling observed that as per the agreement, it is by and large responsibility of appellant to arrange ATF fuel for customer. Moreover, none of conditions envisaged in provisions of rule 33 of GST Rules, 2017 for being a ‘pure agent’ have been fulfilled/satisfied by appellant. Hence, it cannot be said to be ‘pure agent’ and, therefore, amount of reimbursement received by appellant from customer would undoubtedly be included in value of supply of ‘Rental Services of Aircraft’ provided by it.

Case Review

List of Cases Referred to

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