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

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

• • Global Vectra Helicorp Ltd. , In re [2020] 119 taxmann.com 268/[2021] 83 GST 291 (AAR – Guj.) (para 52) affirmed.
  • Union of India v. Intercontinental Consultants & Technocrats (P.) Ltd. [2018] 91 taxmann.com 67/66 GST 450 (SC);
  • Rolex Logistics (P.) Ltd. v. CST [2009] 13 STR 147 (Bang. – CESTAT);
  • Text Hundred India (P.) Ltd. v. CST [2018] 94 taxmann.com 170 (New Delhi – CESTAT) (para 43);
  • Nash Industries (I) (P.) Ltd. , In re [2019] 103 taxmann.com 91/73 GST 234 (AAAR – Kar.);
  • Lear Automotive India (P.) Ltd. , In re [2018] 100 taxmann.com 311 (AAR – Mah.) (para 44.2);
  • Naresh Kumar & Co. (P.) Ltd. v. Union of India [2014] 52 taxmann.com 370/[2015] 49 GST 402 (Cal.);
  • Millennium Constructions (P.) Ltd. v. CST [2015] 39 STR 477 (Tri. – Delhi);
  • Ahluwalia Contracts (India) Ltd. v. CST [2015] 38 STR 38 (Tri – Delhi);
  • Gurmehar Construction v. CCE [2014] 36 STR 545 (Tri. – Delhi);
  • CCE v. Sonali India [2014] 34 STR 47 (Tri.-Delhi);
  • Dholu Construction & Projects Ltd. v. CCE [2014] 41 taxmann.com 292/43 GST 448 (New Delhi – CESTAT);
  • Gulf Oil Corpn. Ltd. v. CST [2010] 20 STR 830 (Tri. – Bang.);
  • Era Infra Engg. Ltd. v. Union of India [2008] 11 STR 3 (Delhi) (para 45.2);
  • Customs & Excise Comrs. v. British Telecommunications Plc [1999] 1 WLR 1376 (para 46);
  • CCE v. Grasim Industries Ltd. [2018] 94 taxmann.com 312/68 GST 569 (SC) (para 47.2);
  • Nell Gwynn House Maintenance Fund Trustees v. Customs & Excise Commissioner [1999] 1 All ER 385 and
  • De Danske Bilimportorer v. Skatteministeriet [2013] 33 taxmann.com 474 (ECJ) (para 49) distinguished.

List of Cases Referred to

• • Global Vectra Helicorp Ltd. , In re [2020] 119 taxmann.com 268/[2021] 83 GST 291 (AAR – Guj.) (para 2)
  • Rolex Logistics (P.) Ltd. v. CST [2009] 13 STR 147 (Bang. – CESTAT) (para 12)
  • Union of India v. Intercontinental Consultants & Technocrats (P.) Ltd. [2018] 91 taxmann.com 67/66 GST 450 (SC) (para 13)
  • Text Hundred India (P.) Ltd. v. CST [2018] 94 taxmann.com 170 (New Delhi – CESTAT) (para 13)
  • Nash Industries (I) (P.) Ltd. , In re [2019] 103 taxmann.com 91/73 GST 234 (AAAR – Kar.) (para 15)
  • Lear Automotive India (P.) Ltd. , In re [2018] 100 taxmann.com 311 (AAR – Mah.) (para 15)
  • Heligo Charters (P.) Ltd. v. CST [Service Tax Appeal No. 86293 of 2017, dated 24-1-2020] (para 15)
  • CST v. Bhayana Builders (P.) Ltd. [2018] 91 taxmann.com 109/66 GST 320 (SC) (para 15)
  • Petronet LNG Ltd. v. Pr. CST [Service Tax Appeal No. 52946 of 2016, dated 21-10-2019] (para 15)
  • Inox Air Products Ltd. v. CCE [2015] 58 taxmann.com 341 (Mum. – CESTAT) (para 15)
  • Naresh Kumar & Co. (P.) Ltd. v. Union of India [2014] 52 taxmann.com 370/[2015] 49 GST 402 (Cal.) (para 15)
  • Millennium Constructions (P.) Ltd. v. CST [2015] 39 STR 477 (Tri. – Delhi) (para 15)
  • Ahluwalia Contracts (India) Ltd. v. CST [2015] 38 STR 38 (Tri – Delhi) (para 15)
  • Gurmehar Construction v. CCE [2014] 36 STR 545 (Tri. – Delhi) (para 15)
  • CCE v. Sonali India [2014] 34 STR 47 (Tri. – Delhi) (para 15)
  • Dholu Construction & Projects Ltd. v. CCE [2014] 41 taxmann.com 292/43 GST 448 (New Delhi – CESTAT) (para 15)
  • Gulf Oil Corpn. Ltd. v. CST [2010] 20 STR 830 (Tri. – Bang.) (para 15)
  • Era Infra Engg. Ltd. v. Union of India [2008] 11 STR 3 (Delhi) (para 15)
  • Union of India v. Mahindra & Mahindra Ltd. 1995 taxmann.com 311 (SC) (para 18)
  • Mirah Exports (P.) Ltd. v. Collector of Customs 1998 taxmann.com 1114 (SC) (para 18)
  • Customs & Excise Comrs. v. British Telecommunications Plc [1999] 1 WLR 1376 (para 22)
  • CCE v. Acer India Ltd. 2004 taxmann.com 409 (SC) (para 24)
  • PSI Data Systems Ltd. v. CCE 1997 taxmann.com 1425 (SC) (para 24)
  • CCE v. Grasim Industries Ltd. [2018] 94 taxmann.com 312/68 GST 569 (SC) (para 24)
  • Aruna Trading Co. v. CST 1983 taxmann.com 866 (All.) (para 26)
  • Nell Gwynn House Maintenance Fund Trustees v. Customs & Excise Commissioner [1999] 1 All ER 385 (para 28)
  • De Danske Bilimportorer v. Skatteministeriet [2013] 33 taxmann.com 474 (ECJ)(para 28).