18% GST applicable on the cost of the diesel incurred for running generator set in the course of providing rental service

Last updated: 31 December 2022
Quick Summary
The Uttarakhand Authority for Advance Ruling (AAR) has determined that the cost of diesel used to run a generator set, when reimbursed by a customer renting the set, is considered an additional charge for the rental service. This means the diesel cost must be included in the total value of the supply. Consequently, an 18% Goods and Services Tax (GST) is applicable to this combined amount.

Court :
AAR, Uttarakhand

Brief :
The AAR, Uttarakhand in the matter of M/s Tara Genset Engineers (Regd.) [Advance Ruling No. 11/2022-23 dated October 31, 2022] has ruled that reimbursement of expenses as cost of diesel for running of Diesel Generator ("DG") set is an additional consideration for renting of DG and is required to be included in value of supply, which will attract 18% Goods and Services Tax ("GST") under the provisions of the Central Goods and Services Tax Act, 2017 ("the CGST Act").

Citation :
Advance Ruling No. 11/2022-23 dated October 31, 2022

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1 Year PLAN
1999
(Excl. of GST ₹359)

BEST VALUE
2 Years PLAN
3499
(Excl. of GST ₹629)

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Bimal Jain
Published in GST
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