In Re : HP India Sales Private Limited
GST
2018 (10) TMI 1515 – AUTHORITY FOR ADVANCE RULING – MAHARASHTRA – 2018 (18) G. S. T. L. 658 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING – MAHARASHTRA – AAR
Dated:- 8-6-2018
GST-ARA-38/2017-18/B-45
GST
SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER
PROCEEDINGS
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by HP India Sales Private Limited, the applicant, seeking an advance ruling in respect of the following questions:
i. Classification of ElectroInk supplied along with consumables under GST; and
ii. Determination of time and value of supply of ElectroInk with consumables under the indigo press Contract.
At the outset, we would lik
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2017 (referred as “MSGST Rules”), having GSTIN 27AAACC9862F1ZI, are engaged inter alia in providing printing supplies to be used in HP's Indigo press machines supplied to customers.
2. The HP Indigo digital printing press (hereinafter referred as HP Indigo) is a printing press uniquely designed for ensuring best quality prints in the industry along with wide colour gamut, substrate versatility, speed, productivity and with the ability to vary every printed copy.
3. The HP Indigo machine is based on a unique digital offset colour technology specially designed to cater the printing requirements of large scale print service providers. The HP Indigo printers are significantly different from other office and industrial use printers due to the specialized liquid ink (hereinafter referred as ElectroInk) being used in its print process.
4. Additionally, ancillaries comprising of oil, binary ink developer, bib, blanket, print imaging plate and other machine products (hereinafter collect
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terms in relation to supply of ElectroInk with consumables. Importantly, the contract stipulates that the supplies shall be the property of the Applicant till such time the supplies are utilized in the presses by the customer for effecting prints.
9. Further, the ElectroInk along with the consumables are moved by the Applicant to the authorised reseller locations in the States of Tamil Nadu, Gujarat and Punjab under a delivery challan along with the necessary road permit, where applicable.
10. Pursuant to the same, such goods are transported by the authorized reseller to the respective customer locations as segregated geographically across India.
The arrangement is diagrammatically explained below:
12. The Applicant has contracted with authorized resellers for making supplies of ElectroInk with cons
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he running statement of accounts are collated for the respective end customers, the Applicant raises a consolidated invoice for the click charges on the reseller. Sample copy of the invoice raised by the Applicant on the reseller is enclosed as Annexure 4.
18. Also the reseller raises an invoice on each of the end customers based on the contractual arrangement between the reseller and the end customer. Sample copy of the invoice raised by the reseller on the end customer is enclosed as Annexure 5.
QUESTION ON WHICH ADVANCE RULING IS SOUGHT
19. In light of the above facts disclosed, the Applicant wishes to seek clarification on the following matters from the Authority for Advance Ruling established in the State of Maharashtra under the MSGST Act:
I. Classification of ElectroInk supplied along with consumables under GST, and
II. Determination of time and value of supply of ElectroInk with consumables under the indigo press contract
STATEMENT CONTAINING APPLICANT'S INTERPRETATIO
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nt consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply”.
ii. Further, Section 8 of the MSGST Act provides that the nature of a composite supply shall be treated as a supply of the principal supply contained therein.
iii. In this regard, Section 2(90) of the MSGST Act defines principal supply as “the supply of goods or services which constitutes predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary”
iv. Accordingly, the nature of the predominant element supplied in a composite supply shall be deemed as the nature of the entire value of supply and levying the rate of GST as applicable on the principal supply.
v. Drawing inference from the above legal provisions, a bundled supply of goods shall constitute a composite supply unde
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dices at page 2
“6. Imaging Products” mean ElectroInk(r), Photo Imaging plates, binary ink developer (BIDs), printing blankets, recycled agent, imaging agent and imaging oil.
Accordingly, the supplies involved in HP Indigo press arrangement comprises of supply of two or more taxable goods being made thereof. Further, the term used in the definition, “or any combination thereof indicates that any combination of supply of two or more goods as a bundle satisfies the requirement for being classified as a composite supply.
– The supply of such goods is naturally bundled
Point 1 of Section C-SUPPLIES at page 3
“3. The Indigo Presses require consistently superior quality Supplies which include Imaging Products, accessories and Operator Maintenance Parts.
Additionally, the document briefing on the Indigo Press Supply Technology as enclosed herewith as Annexure 1 details the printing cycle at page 2 which provides for the manner in which each product is interlinked with the other and requ
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t for each Indigo Press Product Line under the same Supplies purchase program.”
Point “a” of Section G (1) – TIER PROGRAM FOR PURCHASE OF SUPPLIES BY RESELLER at page 4
a. “Click” means a chargeable unit for a Single Color Separation transferred onto substrate, except in the case of textured effect printing, where it is the action of texturing by applying pressure between the substrate and the mold. A Click unit may vary depending on the press model.
The Indigo press machine requires all the Supplies do be present in the device and collectively consumed. The invoicing for such supplies is also done on a per click basis, referring to the charges for a combined use of the ElectroInk and all the other consumables supplied. Therefore, the Electolnk along with the consumables are naturally bundled.
-The goods or services are supplied in conjunction with each other in the ordinary course of business
Point 1 of Section B – Appointment at page 3
“1. HP appoints Reseller as an authorized,
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e mold. A Click unit may vary depending on the press model.
Therefore, drawing reference from the above extracts of the contract, the Indigo press supplies are conisidered as being supplied in conjunction to each other based on the following facts:
* The Supplies are received by the authorised reseller from the Applicant as a
* bundle and are as-is supplied to the end customer;
* Further, the bundled supply of goods is made at the same point of time and is not split over different time periods;
* The billing for such supplies by the Applicant to the authorised reseller and by the authorised reseller to the end customer is also done on a consolidated basis for the entire bundled value of goods consumed and not on per category of goods supplied basis.
Further, the test of supplies being made in the ordinary course of business is satisfied depending on the frequency of the transaction in which the goods are supplied as a bundle. In this regard, re-iterating the above facts, the
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ly, other goods supplied in this regard are mere ancillary products to the ElectroInk in order to support the printing of the final image onto the paper.
The Applicant also submits that the HP indigo digital offset colour technology guarantees the best quality prints in the industry. Further, the liquid ink supplied in this regard is unique to indigo presses to ensure wide and accurate images matching the media. Accordingly, the printing ink supplied herein is the predominant element to ensure execution of entire supply contract by the Applicant
Additionally, every product supplied herein has a separate lifespan independent of each other. Accordingly, it can be inferred that consumables are necessary only to provide support function to the activity of printing and ensuring image processing is smoother and faster. Also, the mode of billing in relation to such supplies is based on the number of dicks generated during a specific period, which primarily requires printing ink to be loaded
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nation of time and value of ElectroInk supplied along with consumables under the Indigo press contract
21. With regards the determination of time and value of ElectroInk supplied along with consumables under GST, the Applicant makes the following submissions:
i. Considering the facts disclosed above in relation to ElectroInk supplied with consumables under GST, the Applicant understands that such goods qualify within the definition of “continuous supply of goods” as prescribed under Section 2(32) of the MSGST Act and reproduced hereunder:
” supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify”.
ii. The Applicant supplies the ElectroInk and consumables
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non-compliance on the part of the Customer with regard to the above-mentioned the same shall be solely to the account of the Customer. If this Agreement or a relevant purchase order is cancelled or terminated, HP will require Reseller to inventory the Supplies and HP shall bill Reseller for Supplies on hand at the Site and not returned to HP within the time specified by HP…”
iii. The above clause suggests that the goods delivered by the Applicant to the Customer through the Reseller shall remain the property of the Applicant and shall be passed on to the Customer through the Reseller only upon invoicing for the same and receiving payment. Therefore the supply of goods is being made on a recurrent basis based on the invoicing by the Applicant.
iv. Since such supplies made by the Applicant are on a continuous basis being in accordance with the terms of the contract entered thereunder and requiring the Applicant to raise an invoice on a periodic basis (as per the number of clicks ma
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ent of account shall be raised within 15 days from the end of each calendar month with respect to supplies made in the preceding month. A sample copy of the successive statement of account is enclosed as Annexure 4.
Point 5 of Section G – at page number 5
“5 ” Within 15 days from the end of each calendar month HP shall issue an invoice to Reseller for the supplies utilised under the Tier Program in the preceding month”
viii. Therefore, the Applicant understands that “supply” under GST law is not effected at the time of removal of goods from its registered location in Mumbai, but when the goods are used by the customer and correspondingly a statement of accounts is raised based on the number of clicks made by the customer in the preceding month.
ix. In this regard, the Applicant understands that the time of supply involved in respect of supply of ElectroInk with consumables to authorised reseller shall be based on the invoice raised basis the statement of accounts covering the n
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details the principle characteristics of its predominant component consumed in the printing process, the HP Indigo's liquid ink – ElectroInk technology along with its uses.
Brief on Digital Offset Colour Technology
The HP Indigo process is fully digital from image creation to printing. The printed image is created directly from digital data, avoiding the use of any “analogue” intermediate media. Further, due to its fully digital process, every image can be a new one, enabling information to be varied as required.
A notable difference between conventional offset and HP Indigo digital offset printing technology is that HP Indigo's ink-ElectroInk, transfers from the blanket to the substrate with virtually no ink splitting that characterizes conventional offset printing systems. This enables the creation and transfer of a different image each printing cycle.
Further HP Indigo technology enables digital printing in full colour. The use of “on the fly colour switching” configura
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r resolution, uniform gloss, sharp image edges, and very thin image layers.
The thin image layer closely follows the surface topography of the paper. This gives a highly uniform finish, complementing the paper and resulting in a similar texture both on the image and on the non-image areas. The HP Indigo ElectroInk is available in an increasing range of colours.
ElectroInk is supplied in a concentrated form that is loaded into the press in cartridges in a “clean hands” operation. Inside the press it is fed into ink supply tanks, diluted with oil and combined with a charging control fluid, to form a fluid mixture of carrier liquid and colourant particles ready for printing. The mixing is done under accurate automated control, resulting in a stable ink with nearly constant physical traits, leading to consistent prints. Furthermore, ElectroInk incorporates pigments which are the same as offset; this supports both the price and the availability of the final ink product.
The Printing Cycl
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ivity and versatility. The cycle revolves around the use and consumption of the HP Indigo's liquid ink – ElectroInk, to yield the best in the class prints. The ancillaries to the printing process consisting of products such as PIP, BID, blanket and other machining products complement and support the transfer of ink into the paper in the most optimum manner to produce quality prints.
Summary
The HP Indigo presses due to their unique technology lead to productivity, by its ability to change data, colour, and substrate at will and with no time penalty. The HP Indigo ElectroInk process is inherently faster than any DEP process by nearly an order of magnitude. The printing presses are robust and designed for 24/7 production. Critical process elements are automatically controlled by the press and reduce operator intervention.
While competing with offset printing for print quality, the digital technology offers important benefits, both economic and environmental. The HP Indigo's li
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ly of indigo press consumables
The Applicant wishes to submit that the terms of reseller agreement (copy provided as Annexure 2 to the Statement of facts submitted along with the application for advance ruling) entered on July 19, 2013 stands valid as on date. Further, any rate revision required to the supply program are agreed mutually between the Applicant and the reseller from time-to-time. However, in this regard no amendment is made to the master agreement dated July 19, 2013.
2. Break-up of revenue earned by Applicant during the last financial year between tier and a-Ia-carte program
The Applicant wishes to submit break-up of revenue earned during the F.Y. 2017-18 for supply of consumables used in Indigo press machines, between tier (click) and a-la-carte model as under:
Sl. No.
Supply model
Revenue earned (in mns.)
% to total revenue
1
Tier (click) Model
1,179.35
99.14
2
A-la-carte
10.28
0.86
Total
1,189.63
100
While all customers in India who have pur
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king print activity. However, the consumables supplied in relation to such printers vary differently from consumables supplied for effecting print from HP indigo machines.
Further, the Applicant wishes to submit that globally where the local regulations permit, the indigo press consumables supplied by HP are charged on a per click basis, based on the actual consumption of goods.
4. Nature of supply under the tier program
In addition to the submissions made in the statement of facts filed along with the application for advance ruling, the Applicant wishes to submit that the tier program of the indigo consumables supply model is a composite supply made under the GST Act. The supply satisfies all of the following conditions prescribed in this regard:
* Supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof:
The HP indigo machine consistently requires superior quality of imaging products for e
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ndled.
In this regard, the Applicant wishes to draw reference to the relevant extracts of the reseller agreement (submitted as Annexure 2 to the statement of facts) to prove the intention of the parties of the contract:
Section 1, Page 1
“Authorization to resell Indigo supplies………” – Redington shall not be the consumer of such goods and only an authorized representative of HP for making the supplies;
Section A, Point 79, Page 2
“Tier Program means the supplies purchase program defined in Section G below, which is subject to this Agreement, and whereby the amount the Reseller shall be charged for Supplies shall be a function of the number of print impressions counted, as defined in Section D below”
Section G, Point 3, Page 5
'Supplies shall remain the property of HP until utilized in the Press(es).”
Section A, Point 11, Page 2
“Maximum Usage Per Impression” means the maximum usage of Imaging Products (ElectroInk and other ancillaries) and/or Operator Maintenance Parts
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basis) which is the essence of the transaction. The quantity of consumables that should be used for an impression is pre-calculated by the Applicant and is constant for all Indigo presses of a particular series. As the print occurs, a particular quantity of each consumable is used and accordingly billed.
Additionally, drawing reference to the supplies agreement between the reseller and the customer, the intent of the parties prove that all the indigo press consumables shall be supplied and consumed together and invoiced based on such consumption. Highlighting, relevant extracts of the agreement as under:
Section 2 page 3
“The unused supplies under the terms of this agreement which are in the possession of the customer shall at all time remain the exclusive property of Redington”
Section 4 page 3
Invoice for the supplies will be raised based on the reading from the Print impression Counter noted…”
Accordingly, the intention of the applicant, reseller and customer is to supply an
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tion of the respective products. The goods are supplied to the end customer generally once a month or for some customers twice a month. The goods are not capable of being used if the same any one of them is not used as required.
* One of such supply is the principal supply
As evident from the chart explaining the flow of consumables, the printing ink (referred as ElectroInk) is the most predominant supply in the bundle. The ink flows through the entire process to effectively generate a print and produce the desired output. It is the most essential and highest consumed product (in terms of volume) in a printing cycle, evident from the fact that 41% of the consumption in terms of value is of ink (refer Annexure -1). The ink determines the quality and resolution of the image being printed, in the manner required by the customer.
* Illustration provided in the definition of composite supply under Section 2(30) of the CCST Act (similar provision in the Maharashtra State GST Act):
Wher
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anket, PIP etc. are essential for printing purpose and has no separate use for customer.
* Additional conditions for a composite supply
Drawing reference to the clarification issued by the Central Board of Indirect Taxes and Customs (“CBIC”) on the concept of Composite supply via a flyer, whether a supply qualifies as a composite supply would depend upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators some of which are listed below:
a. The perception of the customer-
As explained above, the perception of the customer is to receive (consume) all such goods together in order to obtain the desired output. The same can further understood by the fact that the customer agrees to pay the consideration on click basis, i.e. the point in time when the supply of all the consumable actually occurs. Where these consumables were not naturally bundled, t
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and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service.
The HP Electrolnk is the principal supply as for the customers and suppliers the ElectroInk is the main component of the supply as is evident from the consumption. The ancillary supplies only help in transferring the ink from the cartridge to the paper.
d. There is a single price or the customer pays the same amount, no matter how much package they actually receive or use
The invoicing is done on a “per click basis” for all the supplies. Every customer is charged a single price for all the goods, irrespective of the fact that in achieving the final output of a print, there is different proportion of ElectroInk and other ancillaries consumed. Therefore, where a single price is charged in relation to bundled supply of goods or services, the said supply cannot be deemed as a “mixed supply” under GST. The definition of composite supply
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emoved, the nature of the supply would be affected.
The desired print output can only be achieved where all these goods are used as a bundle. They are integral to ensure the final output by the customer is in the manner required.
Therefore, considering the above facts and explanations, the HP indigo consumables supplied under the tier program satisfies all the conditions of a composite supply.
03. CONTENTION – AS PER THE CONCERNED OFFICER-
The submission of Departments as reproduced verbatim, could be seen thus-
1) The applicant submitted that the supply of ink along with oil, plates, consumables, blanket, bib etc. to the reseller is composite supply consisting of supply of goods or services which are naturally bundled and supply with conjunction with each other in ordinary course of business, where ink is the principle supply.
2) To constitute the supply as a composite supply following 4 tests are required to be satisfy:
*
Such supply involves two or more taxable supplies
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3000 and 3300 clicks respectively. This clears that the goods are not mandatorily required to supply in conjunction.
5) Naturally bundled” implies that the recipient of the supply has no option to decide whether he wishes to receive the various elements of the supply provided as a bundled supply. Whereas, if such an option to decide is possible, then the supply cannot be said to be “naturally bundled” and such a supply will not be treated as a “composite supply”. From the number of clicks the user can very well order the quantity of ink and other consumables separately. The way the supplies are bundled must be examined. Mere conjoint supply of two or more goods or services does not constitute composite supply. In the instant case though the ink and other consumables are supplied conjointly, this supply can be made separately and there is no natural binding effect. The method of billing, assignment of separate prices etc. may not be relevant. The applicant has devised the billing on
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ness the supplies are made available to actual user through the network of Distributor and Reseller. The transaction between importer / manufacturer and its distributor is recognized as independent and separate transaction. Further there are separate transactions of such distributor to reseller and reseller to actual user.
There is demand and supply of goods and services on regular basis. Most of times the supply is completed when the goods are removed from one entity/ location to another and tax liability has been discharged by the entity as per provisions. In this case there are two transactions, first between applicant and reseller and second between Reseller and actual user.
In GST law transfer of ownership in goods is not mandatory while effecting supply, e.g. In the case of Branch transfer, the goods are owned by a specific company, still the transfer between its two branches is treated as supply. The applicant has invited attention that the ownership / secured interest lies
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ty Commissioner of State Tax (E-618), Large Tax Unit – 2, Mumbai appeared and stated that they have made written submissions which may be considered.
The application was admitted and called for final hearing on 25.04.2018, Sh. K. Sivrajan, C.A. along with Sh. Kunal Wadhwa, C.A. appeared and made contentions as per their ARA application. Jurisdictional Officer, P. R. Nilewad, Deputy Commissioner of State Tax (E-618), Large Tax Unit – 2, Mumbai appeared and also made contentions as per his written submissions. The contention of both the parties were heard for this issue and matter was closed for order.
05. OBSERVATIONS
We have gone through the written and oral submission made by the applicant and jurisdictional officer in connection to the questions asked in Advance Ruling. As per the documentary evidences and written submissions produced on the record, it is observed that-
5.1 Applicant M/s. H.P. India Sales Pvt. Ltd. is a registered person and is providing to its authorised reselle
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customer uses the printer to take 100 prints in a month and each print costs of Rs. 10/-, then the customer shall be billed Rs. 1000/- for the ElectroInk along with the consumables used for the month. Accordingly applicant raises monthly consolidated invoice for the click charges on the reseller and in turn the reseller raises an invoice on each of the end customers.
We find that on the above factual matrix we have been called upon to decide two questions namely classification of Elecrolnk supplied along with consumables supplied under GST and the time and value of supply of ElectroInk with consumables.
5.2. we shall now deal with each question separately as below :
Question 1- classification of ElectroInk supplied along with consumables under GST .
On perusal of statement containing applicant's interpretation of law and facts with respect to this question, it is revealed that applicant has laid much emphasis to impress upon us that the impugned transaction is 'Composite Su
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ecipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally 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 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.
Thus the essential ingredients that constitute Composite Supply are –
(i) the supply consists of two or more taxable supplies of goods or services or both or any combination thereof,
(ii) such supplies are naturally bundled
(iii) supplied in conjunction with each other and
(iv) such supplied are in the ordinary course of business, one of which is a principal supply.
Now let us examine whether the applicant satisfies the ingredient of composite supply.
In the light of facts discussed above, there is no doubt to conclude that the impugn
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reatment as a manner of determination of value of two services for the purpose of charging service tax is different. The ride is – 'If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character'.
In the present case we find that supply of ElectroInk with consumables by the applicant to the distributor/reseller constitute bundled supply which involves more than two taxable supplies of goods .
The next issue for our consideration in order to constitute impugned supply as composite supply is to find whether the supplies are naturally bundled .The word 'Naturally', is not defined under the ACT, we therefore refer to dictionary to under the meaning . The dictionary meaning is as below,
As per Merriam Webster
1 : by nature : by natural character or ability
* naturally timid
2 : according to the usual course of things : as might be ex
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nal offset and HP Indigo Digital offset Printing Technology. The terms of the contract as mentioned above clearly indicate that the recipient of the supply has no option to select individual supply but to accept it as bundled supply. Thus the transaction of supply of ElectroInk with consumables cannot be considered as Naturally bundled Supply but a compulsory supply. Thus the transaction before us cannot be said to be naturally bundled supply.
5.4 Now we have to decide another aspect of composite supply i.e. whether the goods are supplied in the ordinary course of business.
In this regard useful reference can be made to GST Flyers issued by CBEC in which certain tests are laid down which are listed below to ascertain supply of goods or services or both in the ordinary course of business.
1) The perception of the consumer or the service receiver
2) Majority of service providers in a particular area of business provide similar bundle of services
3) The nature of the various se
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the supplies. All such supplies are required to be consumed together in order to produce desired output. He therefore submits that the goods are supplied in conjunction to each other in the ordinary course of business. However we find that this submission and argument is contrary to their own admission that every product supplied herein has a separate lifespan independent of each other.
The applicant has submitted the consumption pattern of Electro ink along with consumables supplied to authorised reseller. From this consumption pattern it is noticed that if the requisite quantity of ink and other consumables are supplied to the printing machine for first time, the other consumables are not required to be supplied compulsorily. Assuming that the ink is required to be replaced after thousand clicks, the blanket or photo imaging plate is required to be replaced after approximately 3000 and 3300 clicks respectively. Thus we find that the goods are mandatorily supplied in conjunction. Th
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ly 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 separately;
There is no dispute that applicant's supplies consist of two or more than two supplies. It is also not in dispute that the supplies are made in conjunction with each other and made for a single price. We have already observed that each of the supplies can be supplied separately as they are not dependent on each other and one supply of goods does not occasion the supply of other goods. As the transaction put before us satisfies all the ingredient of 'mixed supply' we conclude the transaction would come and fall under 'mixed supply' as defined in clause 74 of section 2 of the GST Act.
Question 2: Determination of Time and Value of supply of ElectroInk
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its that supplies made by them are on continuous basis in accordance with the terms of the contract entered and the applicant is required to raise invoice on periodic basis We find that the supply of goods in the present case fulfil the basic tenets of 'continuous supply' and therefore we find from the above deliberation that the impugned supply is 'continuous supply of goods 'as defined in clause 32 of section 2 of the GST Act.
5.7 Time and Value of Supply –
The next issue for our consideration raised by the applicant is the time and value of supply of Electro Ink with consumables under the Indigo Press Contract. As per the provision of GST ACT, the liability to pay tax on goods arise at the time of supply as determined in accordance with the provisions of section 12 of the Act. As per section 12 the time of supply shall be:
Section 12(2) – Time of supply of goods.
(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accor
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he date on which the payment is entered in his books of account or the date on which the payment is credited to his bank account, whichever is earlier.
(3) ………………………….
(4) ………………………….
(5) Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall-
(a) in a case where a periodical return has to be filed, be the date on which such return is to be filed; or
(b) in any other case, be the date on which the tax is paid.
(6) The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value.
As we have already concluded that the impugned supply is a continuous supply of goods as defined in the clause 32 of section 2 of GST ACT, and therefore the provisions pertaining to time of sup
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cessive statement of account or payments are made, the invoice shall be issued before or at the time of each statement is issued or as the case may be, such payments are received.'
Accordingly we find that applicant has to raise invoice on or before 15th day from the end of each calendar month with respect to supplies made in the preceding month. Thus the time of supply in the present case will be the earliest date between the date of invoice or the date of payments with respect to impugned supply as per the provisions of section 12(2) of the GST Act.
5.8. Value of Supply-
The next issue pertains to values of supply of ElectroInk with consumables under the Indigo Press Contract, the details of such supplies are as below:-
SI. No.
Nature of product
HSN
Consumption (%)
1.
Printing Ink (ElectroInk)
32151190
41%
2.
Blanket
59111000
16%
3.
PIP – Photo imaging plate
59119090/ 84439100
13%
4.
OMP -Other machine products (miscellaneous)
Multiple
10%
5.
BID – Binary
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