Diesel Supplied Free of Cost by Service Recipient to GTA to Be Added to Value of Supply of Service | HC

Case Details: Shree Jeet Transport v. Union of India - [2023] 156 taxmann.com 128 (Chhattisgarh)

Judiciary and Counsel Details

• • Goutam Bhaduri & Sachin Singh Rajput, JJ.
  • Kavin Gulati, Sr. Adv. Raja Sharma & Abhishek Anand, Advs. for the Petitioner.
  • Ramakant Mishra, Ms Anmol Sharma, Ms Anuja Sharma, S.C. Verma & Vikram Sharma, Advs. for the Respondent.

Facts of the Case

In the present case, the petitioner filed writ petition and challenged the decision of Authority for Advance Ruling, Chhattisgarh wherein it was held that GST would be leviable on the value of diesel provided by the service recipient to GTA free of cost. It was contended that it filed appeal but the Appellate Authority for Advance Ruling denied to give ruling due to difference of opinion.

High Court Held

The Honorable High Court noted that transportation is inter-dependent on supply of fuel and fuel would be a crucial component to run business of GTA. Moreover, Section 15(2)(b) provides that value of supply shall include any amount that supplier is liable to pay in relation to such supply.

Since, the expenses to fill diesel in vehicle in furtherance of supply of service in normal condition is to be incurred by GTA and therefore, fuel being an integral part cannot be bifurcated to overcome a tax liability. Moreover, the said provision cannot be by-passed by agreement wherein diesel is agreed to be supplied free of cost by service recipient to GTA. Thus, the Court dismissed the petition with an observation that where diesel would be provided free of cost by service recipient, it would nevertheless be added to value for purpose of GST.