Order date – 30 June 2022

Facts – 

• The Applicant, M/s NTL Private Ltd, is engaged in providing services namely rental services of road vehicles including buses, coaches, cars and other motor vehicles.
• The applicant states that they pay the toll charges and collect the same amount from their clients, which is nothing but a disbursement and not the nature of service provided for and paid. 

Issues – 

• Whether the applicant is liable to pay tax on the toll charges also by adding to outward value of supply of service.
• Whether the value of toll charges is liable to be included in the value of outward supply of service?

Order – 

• The authorities observed that the applicant, being the service provider of transportation service, is the recipient of the service provisioned on payment of toll. Such charges are costs incurred, so that his vehicles can access roads/ bridges to provide transportation services to the recipient. Hence, they are the beneficiary and liable to pay the toll, which is compulsorily levied on the vehicles.
• Reimbursement of such cost is no disbursement, but merely the recovery of a portion of the value of supply made to the recipients. Toll charges paid are therefore, to be included in the value of supply as incidental expenses arising while provision of service as per Section 15(3) of the CGST/TNGST Act, 2017.
• Also, the applicant is liable to pay tax on the toll charges by adding to outward value of supply of service.