In re Revathi Enterprises (GST AAR Karnataka)
Summary: M/s Revathi Enterprises, a Goods Transport Agency (GTA), filed an application for advance ruling concerning the GST treatment of High Speed Diesel (HSD) supplied free of cost by service recipients for dedicated or chartered vehicles deployed for transportation. The applicant stated that, under its transportation contracts, the service recipients were responsible for procuring and supplying diesel at their own cost and that freight payable to the applicant excluded the cost of diesel. The applicant therefore sought a ruling on whether such free-of-cost diesel would form part of the value of its GTA service and whether GST would be leviable on the value of the diesel. The application was filed under Section 97 of the CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017 and corresponding KGST provisions.
The applicant relied, in particular, upon Section 15(2)(b) of the CGST Act, contending that the provision would apply only where an amount that the supplier was liable to incur in relation to the supply was incurred by the recipient on behalf of the supplier. According to the applicant, because the contracts placed the responsibility for procurement and supply of diesel upon the service recipient and the freight excluded diesel cost, the diesel value should not form part of the GTA service value. The Authority recorded that the application raised questions concerning determination of liability to pay tax under Section 97(2)(e), as well as whether a particular activity amounted to or resulted in a supply. However, the Authority did not examine these questions on merits.
It noted that an application for advance ruling under Section 97(1) read with Rule 104 was required to be accompanied by the prescribed fee of ₹5,000/- each under the CGST Act and KGST Act. The applicant had discharged only ₹5,000/- under an incorrect debit head and had not remitted the prescribed fee in full. A personal hearing was fixed for 19.03.2025 pursuant to a letter dated 12.03.2025, but the applicant neither appeared nor furnished clarification regarding payment of the prescribed fee. Thereafter, further communications were issued on 06.03.2026, 25.05.2026, 08.06.2026 and 17.06.2026, providing opportunities to rectify the defect by remitting the balance fee. The Authority also made repeated attempts to contact the applicant telephonically, but the number furnished in Form GST ARA-01 was consistently found switched off or out of service.
After considering the application and documents on record, the Authority held that payment of the prescribed fee under Section 97(1) was mandatory for entertaining an application for advance ruling. Since the applicant failed to comply despite sufficient opportunities, the application was held liable to be rejected as not maintainable. The Authority consequently held itself precluded from examining the substantive questions concerning diesel supplied free of cost under the GTA arrangements. The application filed by M/s Revathi Enterprises was therefore rejected as not maintainable for non-compliance with the mandatory requirement prescribed under Section 97(1) of the CGST/KGST Acts read with Rule 104 of the CGST/KGST Rules.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING KARNATAKA
M/s Revathi Enterprises (Prop. Rama Naik Harjayanaik Dileep Kumar), (hereinafter referred to as the “Applicant”), having GSTIN 29COXPD1219P1Z8 (Cancelled suo-moto)(Effective from 20.04.2025 and principal place of business at # H. No. 4-2218, Raghavendra Colony, Shaktinagar, Raichur, Karnataka, 584170, filed an application for Advance Ruling under Section 97 of the Central Goods and Services Tax Act, 2017 read with Rule 104 of the Central Goods and Services Tax Rules, 2017 and the corresponding provisions of the Karnataka Goods and Services Tax Act, 2017, in FORM GST ARA-01.
2. The Applicant is engaged in the business of transportation of goods as a Goods Transport Agency (GTA). The Applicant submits that it enters into transportation contracts with various companies (service recipients). As per the terms of such contracts, High Speed Diesel (HSD) required for the dedicated (chartered) vehicles deployed for transportation is procured and supplied by the service recipients at their own cost, and the freight payable to the Applicant excludes the cost of diesel.
3. In view of the above, the applicant has sought advance ruling in respect of the following questions:-
a) Whether diesel filled free of cost by the service recipient in the engaged chartered (dedicated) vehicles, would form part of value of supply of service charged by the applicant and whether GST would be leviable on value of diesel filled free of cost by the service recipient or otherwise under GTA service?
4. Admissibility of the Application: – The Applicant, under Column 13 of Form ARA-01, has indicated the category of issue as follows:
i. Determination of the liability to pay tax on any goods or services or both.
ii. Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
The questions raised by the Applicant under Section 97(2)(e) of the Central Goods and Services Tax Act, 2017, relating to the determination of liability to pay tax.
5. Applicant’s Interpretation of Law: – The Applicant submits that the value of High Speed Diesel supplied free of cost by the service recipient is not required to be included in the value of the GTA service and, accordingly, GST is not leviable thereon. The Applicant contends that Section 15(2)(b) of the CGST Act, 2017 applies only where an amount, which the supplier is liable to incur in relation to the supply, is incurred by the recipient on behalf of the supplier. According to the Applicant, where the contract specifically provides that the responsibility for procuring and supplying diesel rests with the service recipient and the freight charged by the Applicant excludes the cost of diesel, the value of such diesel does not form part of the value of the GTA service under Section 15(2)(b) of the CGST Act, 2017.
6.1 PERSONAL HEARING PROCEEDINGS: – The Applicant was provided an opportunity of personal hearing vide this office letter dated 12.03.2025, fixing the hearing on 19.03.2025. However, the Applicant neither appeared before this Authority on the scheduled date nor furnished any clarification regarding the payment of the prescribed Advance Ruling fee.
6.2 In terms of Section 97(1) of the CGST/KGST Act, 2017 read with Rule 104 of the CGST/KGST Rules, 2017, an application for Advance Ruling is required to be accompanied by a fee of five thousand rupees, to be deposited in the manner specified in section 49. The Applicant had not remitted the prescribed fee in full.
6.3 Further, this office issued additional opportunities advising the Applicant to rectify the defect by remitting the requisite balance amount. The details of the opportunities provided to the Applicant for compliance are as follows:
| SL. No. | Letter F. No. & date | Tracking ID | Tracking ID status | Communication on Email id & date |
|---|---|---|---|---|
| 1 | KAR/AAR/OTH/2025-06 dated 06-03-2026 | – | – | Dileepkumarhr123 @gmail.com |
| 2 | KAR/AAR/OTH/2025-06 dated 25-05-2026 | EK5084275113IN | Delivered on 29-05-2026 | Dileepkumarhr123 @gmail.com 26-05-2026 |
| 3 | KAR/AAR/OTH/2025-06 dated 08-06-2026 | EK860781513IN | Delivered on 15-06-2026 | Dileepkumarhr123 @gmail.com 09-06-2026 |
| 4 | KAR/AAR/OTH/2025-06 dated 17-06-2026 | EK860785546IN | Delivered on 22-06-2026 | Dileepkumarhr123 @gmail.com 17-06-2026 |
6.4 Apart from the communications issued through Registered Speed Post and e-mail, this office made repeated attempts to contact the Applicant telephonically on the contact number furnished in Form GST ARA-01. However, no response has been received till date, as the said contact number was consistently found to be either switched off or out of service.
FINDINGS & DISCUSSION
7. At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017 are pari materia and contain identical provisions on all material aspects, differing only in respect of certain specific provisions. Accordingly, unless a particular reference is made to such dissimilar provisions, any reference to the CGST Act, 2017 shall also be construed as a reference to the corresponding provisions of the KGST Act, 2017.
8. We have carefully examined the application, the documents placed on record and the relevant provisions of the CGST Act, 2017 and the KGST Act, 2017. It is observed that, in terms of Section 97(1) of the CGST/KGST Act, 2017 read with Rule 104 of the CGST/KGST Rules, 2017, an application for Advance Ruling is required to be accompanied by the prescribed fee of ₹5,000/- each under the CGST Act and the KGST Act.
9. Further, it is observed that the Applicant had not remitted the prescribed fee in full at the time of filing the application. Accordingly, this Authority issued communications from time to time calling upon the Applicant to rectify the defect by remitting the requisite balance fee. An opportunity of personal hearing was also provided to the Applicant vide this office letter dated 12.03.2025, fixing the hearing on 19.03.2025. Thereafter, further opportunities were provided vide the communications referred to in paragraph 6.3 supra. However, the Applicant neither appeared before this Authority nor complied with the requirement of remitting the prescribed balance fee.
10. The requirement of payment of the prescribed fee under Section 97(1) of the CGST/KGST Act, 2017 is mandatory for entertaining an application for Advance Ruling. In the absence of compliance with the said statutory requirement, despite sufficient opportunities having been provided, the present application is liable to be rejected as not maintainable. Consequently, this Authority is precluded from examining the questions raised by the Applicant on merits.
11. In view of the foregoing, we pass the following:
R U L I N G
The application for Advance Ruling filed by M/s Revathi Enterprises is hereby rejected as not maintainable for non-compliance with the mandatory requirement prescribed under Section 97(1) of the CGST/KGST Act, 2017 read with Rule 104 of the CGST/KGST Rules, 2017.
