2018 (11) TMI 337 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (18) G. S. T. L. 878 (A. A. R. – GST) – Levy of GST – Valuation – Toll Taxes reimbursed by its clients – includibility – reimbursement charges – deduction under Rule 33 from the value of supply, being expenditure incurred as a pure agent – Held that:- The toll is charged for providing the service by way of access to a road or bridge (SAC 9967). The Applicant, being the owner of the vehicles, is the recipient of the service provisioned on payment of toll. The Applicant admittedly is the beneficiary and liable to pay the toll, which is compulsorily levied on the vehicles. The expenses so incurred are, therefore, cost of the service provided to the Banks – Reimbursement of such cost is no disbursement, but merely the recovery of a portion of the value of supply made to the Banks.
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The Applicant is, therefore, not acting in the capacity of a ‘pure agent’ of the Bank while paying toll charges. Such charges are costs
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ervices to the Bank, seeks a Ruling on chargeability of GST on the Toll Taxes reimbursed by its clients or the ability to claim it as a deduction under Rule 33 from the value of supply, being expenditure incurred as a pure agent under the CGST/WBGST Acts, 2017 (hereinafter referred to as the the said GST Act ). Advance Ruling is admissible under Section 97(2)(e) & (g) of the said GST Act. The Applicant submits that the question raised in the Application has neither been decided by nor is pending before any authority under any provisions of the GST Act. The officer concerned raises no objection to the admission of the Application. The Application is, therefore, admitted. 2. The Application states that the Applicant provides security service to the Banks. The Applicant also transports cash/coins/bullion in specially built vehicles or Customized Cash vans (CCVs). In course of such transportation, the vehicles move along National and State Highways and the Applicant pays toll charges t
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who- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. The above Rule provides an example by way of illustration. Corporate services firm A is engaged to handle the legal work pertaining to incorporation of Company B. Other than his service fees, A also recovers from B registration fee and approval fee for the name of the company, paid to the Registrar of Companies. The fees charged by the RoC for registration and approval of the name are compulsorily levied on B. A is merely acting a
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t of toll. The Applicant admittedly is the beneficiary and liable to pay the toll, which is compulsorily levied on the vehicles. The expenses so incurred are, therefore, cost of the service provided to the Banks. Reimbursement of such cost is no disbursement, but merely the recovery of a portion of the value of supply made to the Banks. The Applicant is, therefore, not acting in the capacity of a pure agent of the Bank while paying toll charges. Such charges are costs incurred, so that his vehicles can access roads/bridges to provide security services to the recipient. 6. Toll charges paid are not, therefore, to be excluded from the value of supply under Rule 33. GST shall, therefore, be payable at the applicable rate on the entire value of the supply, including toll charges paid. In view of the foregoing, we Rule as under RULING Toll charges paid are not to be excluded from the value of supply under Rule 33. GST shall, therefore, be payable at the applicable rate on the entire value o
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