Registered transporter providing road transport service to HPCL as GTA and GST is paid by HPCL as recipient of service and no input is being taken by Transporter. Transporter also getting actual reimbursement of toll charges from HPCL on which TDS under income is being deducted by HPCL as contract. Whether this reimbursement of toll charges can be considered as reimbursement of expenses to pure agent and whether No GST is applicable on it or whether it will be included in service as GTA and GST will be paid by recipient of service (HPCL)

Reply- Service by way of access to a road or a bridge on payment of Toll charges is classified under SAC 9967 and exempt from GST. Refer sr. no. 23 of Notification no. 12/2017 (central tax rate) dated 28.06.2017. 

As per Section 15(2)(c) of CGST Act, 2017, the value of supply shall include incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services.

As a result, GST will also apply to the Reimbursement of expenses. The only exception to this rule is when the Expenditure is incurred by a supplier on behalf of a recipient as a ‘pure agent’. There are some conditions required to be satisfied to be considered as a pure agent.

If you are paying Toll charges as a pure agent, it will not be taxable.