GST is Applicable to Reimbursed Fuel Charges for Motor Vehicle Hire Services: AAR

Case Details: Authority for Advance Ruling, Uttarakhand Uttarakhand Public Financial Strengthening Project, In re - [2023] 151 taxmann.com 5 (AAR-UTTARAKHAND)

Judiciary and Counsel Details

• • Anurag Mishra & Rameshvar Meena, Member
  • Ms Gurbhagat Kaur & Rahul Kumar Jha for the Applicant.

Facts of the Case

The applicant was receiving motor vehicle hire services including fuel charges from service providers. It entered into a contract with provider of services wherein liability to arrange fuel and maintenance of vehicle, so deployed would lie with service provider and the applicant would reimburse such expenses. It filed an application for advance ruling to whether service provider can charge GST on whole amount of bill or only on monthly rental excluding night charges and fuel on mileage basis.

AAR Held

The Authority for Advance Ruling observed that that motor vehicle hire services have integral component of running/ operating vehicle from one place to another for transportation. The actual transportation without fuel can’t be possible. Hence, any reimbursement of expenses for providing vehicle hiring services under any head would be nothing but additional consideration for provision of services and it would attract GST on total value of bill.

Therefore, it was held that the service provider would be liable to charge GST on whole amount of bill which in the instant case would be monthly rental and fuel charges on mileage basis.