Order Date: 16 June 2022

Facts:

• The Applicant, Sunil Giri is a Goods Transport Agency (GTA) is about to enter into contract/ Agreement with service recipient for providing GTA services.
• The Applicant is required to transport the goods belonging to the service recipient by deploying trucks/ trailers.
• The scope of service of the Applicant is to provide the truck/ trailer along with the driver and report at the unit of the service recipient. Apart from above, the fuel required for carrying out the transport of goods is in the scope of the service recipient and not in the scope of work of the Applicant.
• That fuel will be in the scope of the service recipient and the Applicant is not concerned, in any manner, with reference to the free of cost fuel. 

Issue:

• Whether the value of diesel, provided by the customer (service recipient) to the trucks, is required to be added to the freight charged by the Applicant?

Order:

• The Authority observed that Hon’ble Supreme Court in CST v. Bhayana Builders (P) Ltd. 2018 -SC has held that where the service provider receives free of cost goods/material from the service recipient, no amount is charged for such goods/material and, therefore, the value of such goods/ materials cannot be included in the gross amount charged by the service provider for the service provided by him. 
• Various other case laws were cited by the Applicant to substantiate its case that diesel filled free of cost by the service recipient is not includible in the value of the GTA service.
• In view of the same, the Authority held that the value of diesel filled free of cost (FOC) by the service recipient is not includable in the value of the GTA service proposed to be provided by the Applicant.