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2019 (8) TMI 1218 - AAR - GSTClassification of supply - Composite supply or not - Ex works plus freight and insurance - CBEC & C Flyer no. 4 dtd. 01.01.2018 - HELD THAT:- It is specifically mentioned in the illustration that Goods packed and transported with insurance, then supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply. The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected” is also indicative of bundling of services in ordinary course of business as mentioned in the CBEC & C Flyer no. 4 and the case of the applicant is the similar one - The above is applicable to the case of the applicant and hence Ex works plus freight and insurance to be treated as composite supplies. Levy of GST - showing and charging freight and insurance portion separately in invoice - HELD THAT:- If freight and insurance portion are shown and charged separately in invoice, it would not change the fact that the supply is a composite supply and hence there cannot be different type of treatments of tax liability of supply of different goods/services naturally bundled together - it is very clear that freight and insurance, charged by the supplier to the recipient of a supply, is included in the value for charging of tax under The Central Goods and Service Tax Act, 2017 and Gujarat Goods & Services Tax Act, 2017. Inclusions specified in section 15(2) which is to be added to the transaction value under GST - HELD THAT:- The arranging of delivery of goods is the responsibility of supplier and accordingly transportation & insurance (anything done before delivery of goods) being arranged by supplier. The actual freight cost incurred by supplier varies with pre contracted price with buyer - GST is applied on supply of goods or services. If there are two values of any supply, then GST is to be taxed on the higher value of supply. Hence in this case, the higher of the two value i.e. the actual cost of Freight and insurance or the pre contracted fixed freight per unit of the product, shall be included in the value of composite supply.
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