Applicant’s supply not a “pure service” under Notification 12/2017 due to mixed goods and service charges

Applicant’s supply not a “pure service” under Notification 12/2017 due to mixed goods and service chargesCase-LawsGSTThe AAR held that the applicant’s supply does not constitute a “pure service” as defined under Notification No. 12/2017-Central Tax (Rate)

Applicant's supply not a “pure service” under Notification 12/2017 due to mixed goods and service charges
Case-Laws
GST
The AAR held that the applicant's supply does not constitute a “pure service” as defined under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, since the consideration received included both the procurement value of goods and service charges without segregation. The applicant failed to satisfy clause (d) of the relevant explanation, which requires distinct treatment of procurement costs separate from service charges to qualify as a pure agent. Consequently, the supply cannot be classified as a pure service, rendering the applicant ineligible for the exemption under Sl. No. 3 of the said notification. The ruling confirms that when goods and services are bundled without clear separation of values, the exemption for pure services does not apply.
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