Home Advance Rulings GST is Payable on Toll Reimbursements : West Bengal AAR

GST is Payable on Toll Reimbursements : West Bengal AAR

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The Authority for Advance Rulings (AAR), West Bengal has held that GST is payable on the reimbursement of toll charges.

The Authority stated that though there is no GST on toll when someone pays the toll and recovers it from a company as a part of services, such reimbursement will be a part of the value of supply and hence liable to GST.

The Applicant provides security service to the Banks. The Applicant also transports cash/coins/bullion in specially built vehicles or Customized Cash vans (CCVs). In course of such transportation, the vehicles move along National and State Highways and the Applicant pays toll charges to both NHAI and State Authority, which is reimbursed by the client Banks.

“The expenses so incurred are, therefore, cost of the service provided to the Banks. Reimbursement of such cost is no disbursement, but merely the recovery of a portion of the value of supply made to the Banks. The Applicant is, therefore, not acting in the capacity of a ‘pure agent’ of the Bank while paying toll charges. Such charges are costs incurred so that his vehicles can access roads/bridges to provide security services to the recipient,” the AAR said.

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