GST DAILY – 382 : Cost of free diesel provided by the recipient cannot be added to the value of the GTA service for the purpose of determining GST liability

Cost of free diesel provided by the recipient cannot be added to the value of the GTA service for the purpose of determining GST liability

The Hon’ble Uttarakhand High Court in this case of New Jai Hind Transport Service V/s Union ofIndia, dated 27.09.2024

👉 Issue:-

✔️ What about if Cost of free diesel provided by the recipient for determining GST liability on GTA Services?

👉 TheHon’ble High Court Judgement:-

✔️ The interpretation of “value of supply” under the GST framework and the importance of contractual obligations in determining tax liabilities. The Court emphasized on the principle that only amounts directly related to the consideration for the provision of taxable services should be included in the valuation for tax purposes. It provides clarity on the treatment of free supplies in the context of service tax and GST, ensuring that service providers are not unduly burdened by costs that do not constitute their revenue for taxable services.