Facts – 

• The Applicant, M/s Uttarakhand Public Financial Management Project, is in receipt of motor vehicle hire service including fuel charges from service providers M/s Baba Tour & Travel and M/s Rajeshwari Travel.
• M/s Baba Tour & Travel Services is charging GST @ 5% (2.5 % SGST and 2.5% CGST) on whole amount of bill (monthly rental + night charges + fuel on mileage basis), whereas M/s Rajeshwari Travel is charging GST @ 5% (2.5 % SGST and 2.5% CGST) only on monthly rent component of bill and no GST is charged on fuel charges.

Issue – 

• Whether the “The service provider can charge GST on whole amount of bill (monthly rental + night charges + fuel on mileage basis) or only on monthly rental (excluding night charges + fuel on mileage basis)?

Order – 

• The AAR observed that the provisions of Section 15 are very clear and in unambiguous terms it has been mandated that any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both. The use of words “supplier is liable to pay in relation to such supply” brings out the intent of the legislature and leaves no room for any doubt.
• The contract entered between the applicant and the provider of services is for motor vehicle hire services, wherein the liability to arrange fuel and the maintenance of the vehicle, so deployed lies with the service provider and is a comprehensive contract with the consideration which varies depending upon the kilometre travelled. Hence, the reimbursement of expenses for providing said services, under any head is nothing but the additional consideration for the provision of said services and attracts GST on the total value.
• Hence, all the consideration including reimbursement of any kind shall form part of value of supply in view of Section 15 of the CGST Act, 2017. It was held that the service provider has to charge GST on the whole amount of bill which in the instant case is monthly rental plus night charges and fuel on mileage basis.