As per provisions of Section 15 (2) (c) of CGST Act 2017 “incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services” is includible in the value of supply. Therefore except CGST, SGST or UTGST all other expenses incurred for the supply is includible in the value of supply.
Tolls would qualify as incidental expenses if incurred by the supplier. It was only not to be included in case the same is qualifies as Pure agent reimbursements. However, since the road permits for other states and toll charges are the responsibility of the person operating the vehicle and thus, they are part of their costs. Accordingly, such value need to form part of taxable value and GST should be charged on such values.
The understanding that toll has to be added to taxable value when paid by supplier was held in the Advance Ruling (West Bengal) of Premier Vigilance & Security Pvt Ltd. The decision held that the Applicant should add such toll to its value of services even without looking into the nature of mode of payment. It was observed that the toll is charged for providing the service by way of access to a road or bridge (SAC 9967). The Applicant, being the owner of the vehicles, is the recipient of the service provisioned on payment of toll. The supplier is the beneficiary and liable to pay the toll, which is compulsorily levied on the vehicles.
Accordingly, basis the above discussion, it is advisable that the tolls, road permits, parking charges and other such expenses be taken as part of taxable value and GST should be charged on them.
