Value of supply— Section 15 of CGST Act— In the instant case, the applicant is providing transport of goods service by road to a recipient which is not a related person, for which consignment note will be issued by the applicant. As per the draft agreement they will have to transport the goods from the factory of the recipient to destination specified by the recipient by deploying vehicle with driver/staff to run/operate, for exclusive transport of their goods but the fuel required to transport the goods shall not be within the scope of work of the applicant and shall be borne by the recipient of the said service. Since the fuel (diesel) is not in the scope of the applicant as per draft agreement hence while charging GST at the applicable rate, on the freight consideration charged by them from the recipient under forward charge mechanism, cost of the fuel consumed/ used for transport of the goods would not be include therein.

In view of the above facts, 'the applicant' is seeking advance ruling as to “Whether the value of free diesel filled by service recipient under the accepted terms of contractual agreement in the fleet(s) placed by GTA service provider will subject to the charge of GST by adding this free value diesel in the value of GTA service, under the Central Goods and Services Tax Act, 2017 Uttarakhand Goods and Service Tax Act, 2017?”

In the instant case although the supplier i.e. the applicant in the course of normal business transaction was required to include the cost of fuel, but for the wordings (read terms and conditions which apparently suites themselves) inserted in the agreement that too between two private entities, are trying to circumvent the statute, which appears was not the intent of the Parliament.

We observe the input i.e. fuel, to run and operate the vehicle, provided free of cost by the recipient of the service, for transportation of goods, shall form part of value of supply in view of Section 15 of the CGST Act, 2017, as the cost of this input has to be paid by supplier of services but incurred by the recipient (as per the terms and condition of the agreement) as for the purpose of levy of GST, cost of all the inputs, whether provided free of cost or not, has to be included in the value of supply.

Held that— The value of free diesel filled by the service recipient in the vehicle(s) provided by the applicant will subject to the charge of GST by adding the free value of diesel to arrive at the transaction value of GTA service.