18% GST payable on Diesel as part of a Composite Service

Last updated: 12 August 2021
Quick Summary
The Karnataka Authority for Advance Ruling has determined that 18% GST is applicable to the cost of diesel used in DG rental services. This decision was made because the contract for DG Set rental is considered a composite supply, where the diesel cost is an integral part of the overall service, not a separate supply of goods. Therefore, the reimbursement for diesel is treated as additional consideration for the DG rental service and attracts GST.

Court :
Karnataka AAR

Brief :
In M/s. Goodwill Auto's [Advance Ruling No. KAR ADRG 44/2021 decided on July 30, 2021], M/s. Goodwill Auto's ('the Applicant') has sought an advance ruling on applicability of Goods and Services Tax ('GST') on cost of the diesel incurred in the form of reimbursements for running Diesel Generator ('DG')Set in the course of providing DG Rental Service

Citation :
Advance Ruling No. KAR ADRG 44/2021 decided on July 30, 2021

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Bimal Jain
Published in GST
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