Page 94 - GSTL_13th August 2020_Vol 39_Part 2

180 GST LAW TIMES [ Vol. 39
supplied by the service recipient on cost recovery basis. In a situation where the
service recipient has supplied the goods on free of cost basis, the title in such
goods had not been passed on to the service provider and hence the service pro-
vider has no right to deal with such HSD as he likes. For each drop of HSD sup-
plied to the service provider, account has to be rendered to the service recipient
because the title in HSD always rests with the service recipient. Service recipient
is not paying any consideration to the service provider on account of HSD, be-
cause service provider is not supplying HSD. Hence the value of HSD need not
be included in the value charged by the applicant in circumstances of the case.
Section 15(2)(b) of the GST Act reads as follows :-
“(b) any amount that the supplier is liable to pay in relation to such sup-
ply but which has been incurred by the recipient of the supply and not in-
cluded in the price actually paid or payable for the goods or services or
both.”
In addition to the above, the applicant further stated that, what has to be includ-
ed is the amount that the supplier is liable to pay in relation to such supply but
which has been paid by the recipient. In this case, applicant, who is the service
provider, is not liable to pay the cost of HSD because applicant has not pur-
chased HSD from any other person. There is no liability to pay the cost of HSD
on the part of the applicant.
6. Record of personal hearing :
The authorized representatives of the applicant, Sri M. Ramachandra
Murthy, tax consultant appeared for Personal Hearing on 19-12-2019 and reiter-
ated the submission already made in the application.
7. Discussion and findings :
We have examined the issues raised in the application with reference to
the relevant provisions of the Act and the contractual obligation of the applicant.
Section 7(1) of CGST Act, 2017 reads as under :-
“For the purposes of this Act, the expression “supply” includes -
(a) all forms of supply of goods or services or both such as sale,
transfer, barter, exchange, licence, rental, lease or disposal
made or agreed to be made for a consideration by a person in
the course or furtherance of business;
(b) import of services for a consideration whether or not in the
course or furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be
made without aconsideration;”
Section 15(2) of CGST Act, 2017 stipulates as under :-
(2) The value of supply shall include -
(a) any taxes, duties, cesses, fees and charges levied under any
law for the time being in force other than this Act, the State
Goods and Services Tax Act, the Union Territory Goods and
Services Tax Act and the Goods and Services Tax (Compensa-
tion to States) Act, if charged separately by the supplier;
(b) any amount that the supplier is liable to pay in relation to such sup-
ply but which has been incurred by the recipient of the supply and
not included in the price actually paid or payable for the goods or
services or both;”
GST LAW TIMES  13th August 2020  94