Gujarat AAR: Value of Supply for Helicopter Hiring Includes Fuel Provided
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The Applicant Global Vectra Helicorp Ltd employs a fleet of around 30 helicopters (aircraft) for providing rental services with or without operators under the charter hire services entered into by the applicant with various customers. The applicant is responsible only for operating and maintaining the aircraft.

The service provided by applicant falls under HSN 996603, i.e. rental services of aircraft including passenger aircraft, freight aircraft, and the like with or without operator in terms of  Notification No.11/2017-Central Tax (Rate) dated June 28, 2017 (Charter Hire Services).

The customers are responsible for filling the Aviation Turbine Fuel (ATF) which is required for flying the aircraft. However, at a few locations where the customer might be unable to provide the fuel. The contract requires the applicant to procure the fuel on behalf of the customer to ensure continuity of flying.

Also Read: Karnataka AAR: Refundable Deposit for Maintenance is Not Liable to GST

Subsequently, the fuel cost is reimbursed to be by the customer at actual without charging any mark-up. Hence, in this case, the applicant undertakes the activity of procurement of fuel as a ‘pure agent’.

The applicant asked advance ruling on the issue whether the amount recovered as reimbursement is included in the value of supply as per the valuation provisions under GST. 

The two-member bench ruled that the M/s. Global Vectra Helicorp Ltd. is required to include the fuel cost procured on behalf of the customer in the value of services provided.

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