Page 93 - GSTL_13th August 2020_Vol 39_Part 2

2020 ] IN RE : PULLURI MINING & LOGISTICS PVT. LTD. 179
Private Limited (hereinafter referred to as service recipient’) for executing mining
contract at Srinagar, Yanakandla Village, Banaganapalle Mandal, Kurnool Dis-
trict, Andhra Pradesh in the nature of raising of Limestone (excavation) at
Yanakandla Limestone Mines, and other such mines in Andhra Pradesh and to
deliver Limestone to Yanakandla Limestone Hopper belonging to Sree Jayajothi
Cements Private Limited, the above works are to be carried out by using the
listed equipments and vehicles. The listed heavy equipment & vehicles will be
deployed for exclusive usage of this contract and shall not move out of the ser-
vice recipient premises unless it is essential for performance of the contract. HSD
oil required for operating the above heavy equipment & vehicles will be under
the scope of the service recipient and HSD oil is issued free of cost from service
recipient’s storage tank. The applicant presented copy of the work order in this
regard.
4. Questions raised before the authority :
The applicant seeks advance ruling on “Whether the HSD Oil issued free
of cost by the service recipient to the applicant would form part of value of sup-
ply of service by the applicant as per Section 15 of the CGST Act, 2017? And
more particularly under sub-section (2)(b) of Section 15 of the CGST Act”.
On Verification of basic information of the applicant, it is observed that
the applicant falls under Central jurisdiction, i.e. Superintendent, Nandyal-II
Range, Kurnool CGST Division. Accordingly, the application has been forward-
ed to the jurisdictional officers and a copy marked to the State tax authorities to
offer their remarks as per the Sec. 98(1) of CGST/APGST Act, 2017.
In response, remarks are received from the jurisdictional officer con-
cerned stating that there are no proceedings lying pending or passed relating to
the applicant on the issue, for which the Advance Ruling sought by the appli-
cant.
5. Applicant’s interpretation of law and facts :
The applicants’ contention is that the value of HSD Oil need not be in-
cluded in the value of supply and it need not pay GST on the value of HSD oil
being supplied by the service recipient in relation to the said supply of service.
The applicant’s statement of interpretation of law is based on Section 9
and Section 15 of the CGST Act.
The applicant’s claim is that as per the work order issued by the service
recipient, HSD oil is required for heavy equipment & vehicles will be under the
scope of the service recipient and issued on tree of cost basis from service recipi-
ent’s & storage tank. As HSD oil required is issued free of cost, they have quoted
comprehensive price for rendering the above specified services excluding the
said fuel cost.
The applicant is of view that the value of HSD Oil need not be included
in the value of supply and it need not pay GST on the value of HSD oil being
supplied by the service recipient in relation to the said supply of service. The
phrase ‘any amount that the supplier is liable to pay in relation to such supply
but which has been incurred by the recipient of the supply’ appearing in Section
15(2)(b) of the GST Act shall be understood as the ‘consideration’ which has been
included in the total price payable to the service provider, but for various rea-
sons, which has been incurred by the recipient. Section 15(2)(b) would be appli-
cable where the total contract price is inclusive of the value of HSD but has been

GST LAW TIMES  13th August 2020  93