GST Update on Will overloading charges be included in the assessable value or not?

The overloading charges incurred by the transporter and recovered from us will be included in the assessable value or not.
With reference to this, we submit that overloading penalties are basically the penalties levied upon overloading a vehicle beyond the limit prescribed under the statute. The Motor Vehicle Act (MVA) 1988, Central Motor Vehicle Rules, 1989 and State Motor Vehicle Rules are the legal instruments for the conduct of road traffic in India. The vehicle overloading penalties are levied under authorities of these acts. Now the question arises whether the assessee is liable to pay GST on reverse charge basis on the amount charged by GTA so as to cover up the overloading penalties charged to it?
The value of supply is determined under section 15 of the CGST Act, 2017. As per clause (a) of sub section 2 of the said section, value includes any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than CGST Act, the SGST Act, the UTGST Act and the GST (Compensation to States) Act, if charged separately by the supplier.
The overloading penalties are neither any tax, duty, cess or fee. However, it may fall within the meaning of "charges". If it is so, it will be included in the transaction value and tax will be levied on the same.
The terms charges and penalties have neither been defined under the GST law nor the Motor Vehicle Act nor General Clauses Act. Thus, if we go by their meaning as per oxford dictionary then ‘charge’ means:-
• “Demand (an amount) as a price for a service rendered or goods supplied” or
• "charge something to means record the cost of something as an amount payable by (someone) or on (an account)
While penalty means “A punishment imposed for breaking a law, rule, or contract.”
In our view, the term charges is very wide and it covers almost all the costs incurred and recovered from other party, whether or not it is statutory levy. Therefore, in our view, the penalty paid or overloading and recovered from the party will form part of transaction value and GST will be leviable on the same.

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GST Update on Will overloading charges be included in the assessable value or not?

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