Goods and Services Tax – GST – By: – Bimal jain – Dated:- 20-7-2018 – GST Charcha: Consultancy and support services aren t composite supply in GST Facts of the case: M/s Five Star Shipping ( the Applicant or FSS ) is a partnership firm providing Marine Consultancy Services ( MCS ) to Indian/ Foreign ship owners. MCS provided by the applicant includes following types of services: • Consultancy services viz. analyzing commodity, shipping & freight market (i.e. collecting marketing intelligence and updates) which is disbursed to the ship owners along with finding potential charters for the foreign ship owners. • Support services viz. monitoring voyage execution for smooth & efficient operations, optimizing global trade & revenue for ship owners, examine lay time calculations, arranges for reconciliation of accounts for eventual settlement with the charters. The Applicant was paid fee as a percentage of gross revenue in each charter party contract, which was payable
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l 18, 2018, perused the Agreement for supplying MCS services and ruled as under: • Provision of MCS does not constitute composite supply in GST on account of following: Both services have been specifically set out in the Agreement and there is no guarantee that any or all the services will be assigned to the Applicant; Foreign ship owner is at liberty to appoint other consultant(s) for part of the activities; By specific design of the contract, any service which could not be identified and said to be the principal supply; To foreign ship owner, both the services are important, and none could be identified as principal supply. • Supply of consultancy services, when supplied distinctively with separate fee shall not fall under category of Management consultancy as consultancy services provided by the Applicant are not in nature of guiding ship owning company in the management of their company but are only in the nature of consultancy in respect of opportunities of marine transp
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s) for part of the activities, may not be taken as the deciding factor. If so happens then the illustration provided in Section 2(30) of the CGST Act, 2017, which states that where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply , would also become futile. Here also, the party is at liberty to choose or not to choose any or all of the services with supply of goods. Reference may further be drawn from ruling of Hon ble AAR, West Bengal in the application filed by In Re : M/s Global Reach Education Services Pvt Ltd, 2018 (4) TMI 808 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL where the applicant was engaged in overseas education advisory, promoting various courses of foreign Universities in India among prospective students, making the prospective students aware about the course fee and other associated costs, market intelligence about the latest educational tre
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