2018 (10) TMI 257 – AUTHORITY FOR ADVANCE RULING – UTTAR PRADESH – 2018 (17) G. S. T. L. 45 (A. A. R. – GST) – Classification of Supply – composite or mixed supply? – supply of comprehensive annual maintenance service – principal supply – place of provision of service – service recipient – taxability.
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Whether supply of comprehensive annual maintenance service which may also involve incidental supply of spare parts/ goods should be classified as a composite supply or mixed supply?
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In case the said contract is considered as composite supply, what is the principal supply between goods or services?
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In case goods are considered as principal supply, how the taxability should be determined considering: i. The contract would entail supply of various goods falling under different tax brackets; ii. These goods would be supplied on a need basis as and when required at different point(s) of time and iii. There is no fixed value ascribed for goods in the contract considering the
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should be naturally bundled; c. The taxable supplies should be supplied in conjunction with each other; and d. One taxable supply should be a principal supply – In such case, the supply which is the principal supply is treated as the main supply and the entire transaction should be eligible to GST as per the principal supply.
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Where the service provider and service recipient of a service are located in India, the provisions of Section 12 of the of IGST Act, 2017 determine the place of supply of services. Sub-section (10) of Sec. 12 ibid enjoins that place of supply if service on-board a train shall be the first scheduled points of departure of the convenience. If the location of the supplier and place of are not in the same State or Union territory, it shall be treated as inter-State supply of Services and IGST shall be levied, otherwise CGST & SGST shall be levied – If the supply of services is not made on-board a train, the location of a registered service recipient shall be th
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alue, SGST @ 9% of the taxable value or IGST @ 18% of the taxable value.
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Where the service provider and service recipient of a service are located in India, the provisions of Section 12 of the IGST Act, 2017 determine the place of supply of services – The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey. – Order No. 4 Dated:- 16-5-2018 – Shri Sanjay Kumar Pathak, Member (State Tax) and Dinesh Kumar, Member (Central Tax) ORDER M/s. GE Diesel Locomotive Private Limited, Locomotive Shed Roza, Post Roza RS, Shahjanpur, Uttar Pradesh (hereinafter called the applicant) is a registered assessee under GST having GSTN : 09AAGCG1589HIZA. 2. The applicant is engaged in the business of import and manufacture of rail locomotive engines for supply to Indian Railways. The applicant had made a bid for a tender floated by the Indian Rai
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i. The contract would entail supply of various goods falling under different tax brackets. ii. These goods would be supplied on a need basis as and when required at different point(s) of time. iii. There is no fixed value ascribed for goods in the contract considering these goods would be supplied depending upon condition of the locomotive at the time of maintenance. (d) In case services are considered as principal supply, what tax rate should be applicable? (e) In case of the said contract, what is the relevant place of supply and type of tax which needs to be discharged (i.e. CGST & SGST or IGST)? 4. The applicant was granted a personal hearing on 20-4-2018. Shri Ankush Goel, Tax Head, M/s. GE Diesel Locomotive Private Ltd., and Rjeev Dewan, Consultant, M/s. GE Diesel Locomotive Private Ltd. appeared on behalf of the applicant. In the written submission, the applicant has submitted that they are engaged for supplying 1000 locomotives as well as ensuring comprehensive annual maint
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lly bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply" Illustration – Where goods are 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. And as per Section 2(74) of the CGST Act, 2017/SGST Act, 2017 has defined the term 'mixed supply' to mean – "two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply" Illustration – A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied sepa
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, namely- (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply;". 7. The essential conditions for a supply to qualify as composite supply can be highlighted as under : a. Two or more taxable supplies of goods or services or both; b. The taxable supplies should be naturally bundled; c. The taxable supplies should be supplied in conjunction with each other; and d. One taxable supply should be a principal supply. In such case, the supply which is the principal supply is treated as the main supply and the entire transaction should be eligible to GST as per the principal supply. 8. Section 10(1)(a) of the Integrated Goods and Services Tax Act, 2017 ("the IGST Act") provides for determination of the place of supply of goods. In case of supply involving movement of goods, the place of supply would be the place where the goods are handed over to the recipient. The relevant extract has be
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GST@ 9% of the taxable value or IGST @ 18% of the taxable value. Where the service provider and service recipient of a service are located in India, the provisions of Section 12 of the of IGST Act, 2017 determine the place of supply of services. Sub-section (10) of Sec. 12 ibid enjoins that place of supply if service on-board a train shall be the first scheduled points of departure of the convenience. If the location of the supplier and place of are not in the same State or Union territory, it shall be treated as inter-State supply of Services and IGST shall be levied, otherwise CGST & SGST shall be levied. If the supply of services is not made on-board a train, the location of a registered service recipient shall be the place of supply of service as per Section 12(2) ibid. 11. The jurisdictional Commissioner, CGST i.e. the Commissioner, CGST & CX, Lucknow has also submitted views on the above said Advance Ruling application which are as under – The activity of the party is a s
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ce the supply of maintenance service is for a one and fixed price with or without supply of spare parts/goods and supply of service and goods is made in conjunction with each other in the ordinary course as per maintenance contracts, this maintenance service to the extent of presence of all the necessary ingredients cited in the legal provisions quoted supra, is naturally bundled with the incidental supply of goods., it is case of composite supply of service, (b) In case the said contract is considered as composite supply, what is the principal supply between goods or services ? Ans. – The said contract merits to be considered to be a composite supply of service, and principal supply is service inasmuch as the supply of goods is merely incidential to the maintenance contract in the given facts and circumstances. (c) In case goods are considered as principal supply, how the taxability should be determined considering the following : i. The contract would entail supply of various goods f
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