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2020 (11) TMI 1038 - AAAR - GSTClassification of supply - composite supply or not - naturally bundles services or not - supply of mud engineering services along with supply of imported mud chemicals and additives provided on consumption basis by the applicant under the Contract - supplies made under the Contract merits classification under Entry 9986 (ii) - Service of exploration, mining or drilling of petroleum crude or natural gas or both and subject to GST at the rate of 12%/18% as the case may be? - supply of mud chemicals and additives on consumption basis at OIL India's location in India provided under the Contract qualify for concessional GST rate of 5% against an Essentiality Certificate ('EC') under Notification No. 50/2017-Customs dated 30th June 2017. HELD THAT:- The supply of Mud Engineering Services and supply of chemicals and additives are undoubtedly two specialized and distinct supplies. Now it requires to be examined whether both the said supplies of chemicals and additives and rendering the mud engineering services constitute a 'composite supply' or not - the two taxable supplies under discussion are to be examined in light of the two primary conditions i.e., whether they are 'naturally bundled' and are 'supplied in conjunction' with each other. In the absence of the clear cut explanation in the Act, regarding the concept of 'naturally bundled' the reliance is placed on Education Guide issued by CBEC (now CBIC) in the year 2012. Thus, it is observed that both the supplies are not supplied or provided as a complete package 'at a single price'. The tax invoices filed by the appellant reveal that different invoices are raised for both the supplies separately and individually. With reference to the parameter (b) mentioned above, the supplies of chemicals and additives and mud engineering services are two different supplies and separately available. Section 3 of the contract no.6205290 projects the schedule of rates distinctly for both the supplies. Moreover, in the instant case the supply of chemical and additives and mud engineering services can be procured in a piecemeal approach up to the satisfaction of the service recipient. It is a fact, as admitted by the appellant that it is a clause inserted in the contract to protect the interest of OIL, the right to seek replacement of the personnel/ goods independently if they are not as per satisfaction of OIL. It clearly indicates that both the supplies are not naturally bundled. The said supplies of the mud engineering services and supply of chemicals and additives are different supplies liable to tax under the CGST/APGST Act. Thus, in view of the discussions the observation made by the Advance Ruling Authority is upheld, rejecting the interpretation of the appellant.
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