Toll Charges paid are not to be excluded from the value of supply under Rule 33 of the CGST Rules, 2017, and hence GST would be payable on the entire value of the supply including the toll charges paid.

Facts: Applicant while providing security services to banks, also transport cash/ coins/ bullions in specially built vehicles and in course of such transportation pays toll charges which is reimbursed by client banks.

Issue: Whether 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.

Held: AAR in this case held that, the Toll charges paid are not to be excluded from the value of supply under Rule 33. GST shall, therefore, be payable at the applicable rate on the entire value of the supply, including toll charges paid. The Applicant is not acting as a ‘pure agent’ of the Bank while paying toll charges, which are the cost of the service provided to the Banks so that his vehicles can access roads/bridges to provide security services to the recipient.

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