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Reimbursement of toll charges not excluded from value of supply; attracts GST: AAR

November 6, 2018[2018] 99 taxmann.com 79 (AAR - WEST BENGAL)
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CGST : Payment of toll charges being cost of service provide to clients to be included in value of supply under Rule 33 and GST is to be paid on entire value of supply including toll charges paid

• Classification of services (NR) - Toll charges - Where applicant is not acting as a 'pure agent' of Bank while paying toll charges, which are cost of service provided to Banks so that his vehicles can access roads/bridges to provide security services to banks, said toll charges are not to be excluded from value of supply under Rule 33 and GST shall, therefore, be payable on entire value of supply, including toll charges paid

• Applicant provides security services to banks. It also transports cash / coins / bullion's in specially built vehicles or customized cash vans.

• In course of such transportation, vehicles move along National and State Highways and applicant pays toll charges to both NHAI and State Authority, which is reimbursed by client banks.

• Expenses so incurred are, therefore, cost of services provided to banks and reimbursement of such cost is no disbursement, but, merely recovery of a portion of value of supply made to banks - Therefore, applicant is not acting in capacity of a 'pure agent' of bank while paying toll charges, and thus, same is to be excluded from value of supply under Rule 33, and, therefore, GST is to be paid on entire value of supply, including toll charges paid.

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