Applicant company provides security and transportation services to banks for ferrying cash in customized cash vans sought for a ruling on the applicability of GST on the Toll Taxes reimbursed by its clients or the ability to claim it as a deduction under Rule 33 from the value of supply, being expenditure incurred as a pure agent. As per the agreements, the actual toll and parking charges will be paid. But the banks do not authorize it as a ‘pure agent’ or acknowledge toll as their own liability.

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.