In re Rajasthan Tourism Development Corporation Limited (GST AAR Rajasthan)
In the case of In re Rajasthan Tourism Development Corporation Limited (GST AAR Rajasthan), the applicant, Rajasthan Tourism Development Corporation Ltd. (RTDC), operates the luxury tourist train “Palace on Wheels” (POW) in collaboration with Indian Railways. The central issue was whether RTDC should pay Goods and Services Tax (GST) on charges such as haulage and station user fees paid to Indian Railways, which were later recovered from the operator. The AAR examined whether these charges could be classified under the “pure agent” provision, which would exempt them from GST. RTDC argued that it was acting as a pure agent in paying charges on behalf of the operator. However, the AAR determined that RTDC did not meet the conditions for a pure agent, as it had not entered into an explicit contractual agreement with the operator to act as such. Therefore, RTDC was liable to pay GST on all relevant charges, with rates varying between 5% and 18%, depending on the service. The ruling concluded that RTDC, being the direct recipient of services from Indian Railways, must pay the applicable GST on these charges, which are not exempt under the pure agent framework.
