Valuation of Supply — In the instant case, authority find that they are providing services “Rental services of aircraft including passenger aircrafts, freight aircrafts and the like with or without operator” classifiable under Heading 9966 of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 on which applicable GST is 18%.

The applicant is holding a Non-scheduled Operators Permit (NSOP) (No.8/1998) issued by the Directorate General of Civil Aviation and employs a fleet of around 30 helicopters (aircrafts) for the purpose. Under the charter hire services entered into by the applicant with various customers, the applicant is responsible for operating and maintaining the aircrafts.
Aviation Turbine Fuel (ATF) is required for flying the Aircrafts. While in terms of the contracts, the applicant agreed to provide rental services of aircraft (with or without operator) in respect of the ATF, it was agreed that provision of the same for the purpose of flying of the aircrafts would be the responsibility of the Customers. However, at locations where the customer is unable to provide the fuel, in order to ensure continuity of flying, the contract requires GVHL to procure the fuel on behalf of the Customer and subsequently the cost of the fuel is reimbursed by Customer at actual (without charging any mark-up). GVHL undertakes the activity of procurement of fuel as a ‘pure agent’.

The applicant has put forward the following question on which Advance ruling is required:

“Whether in terms of the valuation provisions under GST legislation, amount recovered as reimbursement (at actual) by the Applicant from the Customer, for the fuel procured on behalf of the Customer is required to be included in the value of services provided by the Applicant?”

Held that-- In terms of the valuation provisions under GST legislation, the amount recovered as reimbursement (at actual) by the applicant from the customer, for the fuel procured on behalf of the Customer is required to be included in the value of services provided by the Applicant.—Global Vectra Helicorp Ltd., In Re… [2020] 26 TAXLOK.COM 095 (AAR-Gujarat)