GST: Free supply of fuel by recipient has to be considered for taxable value on GTA service.


GST: Free supply of fuel by recipient has to be considered for taxable value on GTA service.


Goods Transport Agency (GTA)

In the present case, the petitioner filed writ petition and challenged the decision of Authority for Advance Ruling, Chhattisgarh wherein it was held that GST would be leviable on the value of diesel provided by the service recipient to GTA free of cost. It was contended that it filed appeal but the Appellate Authority for Advance Ruling denied to give ruling due to difference of opinion.

Section 15(2)(b) of CGST Act 2017 says that the value of supply shall include any amount that the supplier is liable to pay in relation to such supply but it has been incurred by recipient of supply and not included in the prices actually paid. This section imposes statutory obligation.

Therefore, even by agreement between the GTA and service recipient, this statutory liability cannot be sidelined by seeking to have the contract provide for recipient giving diesel FOC to GTA. The value of service agreed to be provided necessarily will depend on the nature of service and the nature of business as without fuel the entire business of GTA cannot survive.

Fuel supply is essential to the operation of the GTA since transportation depends on it.Therefore, the Circular No.47/21/2018-GST dated 8th June 2018 on which the petitioner tried to rely upon would not be of any help especially considering the nature of business and the provisions of Section 7(1)(a) and 15(2) (b) of CGST Act.

Though the diesel was provided free of cost by the service recipient to the transporter providing GTA service, it would nevertheless be added to the value for the GST purposes.

{M/s. Shree Jeet Transport – WPT No.117 of 2022 DECIDED ON 17.10.2023 – High Court of Chhattisgarh}


The copy of the order is as under:

WP(T)117_22(17.10.23)_23 New



Krishnakant Jakhotia 

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