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2021 (10) TMI 118 - AAAR - GSTValuation - amount recovered as reimbursement (at actual) by the appellant 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 appellant or not - pure agent services or not - Circular No. 47/21/2018-GST dated 8.6.2018 - HELD THAT:- In the instant case, the appellant has charged the amount spent by them towards arrangement/providing of ATF for flying of Helicopter in respect of supply of rental service of helicopter provided to the ONGC. The appellant has collected the said amount in the form of reimbursement from their customer / recipient of supply of service and the said reimbursement is in respect of the arrangement/providing of ATF made by them, at the time of / before the delivery of supply of services to their customer/recipient. Thus, in terms of Section 15(2)(c) of the GST Acts, 2017, the arrangement of ATF/providing of ATF in the helicopters/aircrafts is the activity done by the appellant at the time of OR before the supply of services to their customer AND the appellant is charging the amount spent in respect of the said ATF, from the customer in the form of reimbursement. Hence, the conditions of Section 15(2)(c) have been fulfilled and accordingly, the amount charged by the appellant (in respect of the arrangement/provision of ATF made by them for supply of “Rental service of Helicopter”) from their customer in the form of reimbursement, is undoubtedly includible in the value of supply of services of ‘Rental services of aircrafts’ in the instant case. In terms of Section 15(2)(c) of the GST Acts, 2017, the arranging of/provision of ATF in the helicopters/ aircrafts is the activity done by the appellant at the time of OR before the supply of services to their customer AND the appellant is charging the amount spent in respect of the said ATF, from their customer in the form of reimbursement. Hence, the conditions of Section 15(2)(c) of the GST Acts, 2017 have been fulfilled and accordingly, the amount charged by the appellant (in respect of the ATF fuel) from their customer in the form of reimbursement, is undoubtedly includable in the value of supply of services of ‘Rental services of aircrafts’ in the instant case. The contention of the appellant that the responsibility of supply or arrangement of ATF is that of the customer only, is far from the truth and simply unacceptable. Moreover, whether the appellant has derived any benefit in the form of mark-up or otherwise from the reimbursement of fuel from the customer, is not the sole factor for determination of valuation of supply of “rental service of helicopter” under the provisions of the GST Acts, 2017 and the rules frame there under . Further, the appellant stating that it cannot be contended that fuel was an essential component of the services provided by the appellant, is wrong and completely out of context since without supply of ATF, the helicopters of the appellant would not fly and there would be no supply of ‘Rental services of aircraft’ by the appellant in the instant case. Since none of the conditions envisaged in the provisions of Rule 33 of the GST Rules, 2017 for being a ‘Pure Agent’ have been fulfilled/satisfied by the appellant, they cannot be said to be ‘pure agent’ in this case and therefore the amount of reimbursement received by the appellant will undoubtedly be included in the value of supply of ‘Rental Services of Aircraft’ provided by them. Although the appellant have stated that fuel reimbursements from customers are not liable to GST as they are not debited to the P&L, are treated as receivables from customers and on recovery of such receivables, the amounts recovered are adjusted against the receivables and that books maintained are as per accounting standards, the fact remains that the value of supply needs to be determined in accordance with the statutory provisions of the GST Acts, 2017 and rules framed there under, which have been elaborately discussed and the valuation of supply is not dependent on the accounting treatment given to any expenditure or cost, hence their contention cannot be accepted. Thus, in terms of the valuation provisions under GST legislation, amount recovered as reimbursement by the appellant M/s. Global Vectra Helicorp Ltd. from the customer, for the fuel procured for use in the helicopter provided on rent to customer is required to be included in the value of services provided by the Appellant.
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