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2021 (4) TMI 565 - AUTHORITY FOR ADVANCE RULING, KARNATAKAClassification of supply - rate of tax for the scope of supplies - independent supplies or composite supply with principal supply of goods - supplies made by different Cost Centres - naturally bundled services - Time of supply - HELD THAT:- It is seen that the applicant was a successful bidder to the tender invited by the BMRCL and the tender is for “Supply of 150 numbers of Standard Gauge Intermediate Cars compatible with and suitable for integration with the existing trains of Bangalore Metro Rail Project Phase-I”. The applicant has applied and been allotted the work and the applicant has entered into the contract with BMRCL vide Contract No.3 RS-DM dated 25th March, 2017. It is clear that the contract is for manufacture and supply of Standard Gauge Intermediate Cars along with integration with installation and commissioning of cars supplied, including training, supervision and maintenance, supply of spares, preparation of manuals etc. - the contract was for supply of intermediate cars which are compatible with the existing trains and for integration with installation and commissioning of cars supplied, including training, supervision and maintenance and supply of spares and preparation of manuals etc. and this is a single contract. The contract is verified and found that the contract is a single contract for both supply of goods and also for services related to those goods supplied, like installation, integration, commissioning, training and maintenance and splitting of the entire contract is for the purposes of milestones in the completion of the contract and is a single continuous chain. The Contract agreement also clearly states that the contract is a single contract involving supply of goods and services. Further, it is also seen that the contract cannot be separated and awarded to different persons and since the nature of the spares and services are exclusive to the main supply, it cannot but be awarded to the same person. It is seen that the Total Contract Price is split up into separate Contract Prices cost centre wise and one of the cost centre H is optional, and is incidental but integral part of the Supply contract. Further, it is also important to note that there is no option on the supplier as far as supplies of spares are concerned - it can be seen that supply covered under Cost Centre H, being optional, cannot be treated as a part of the contract of supply of 150 cars and integration and other services, until that option is exercised by the contractee. This cost centre would be operative only on the request of the contractee and when such request is made by the contractee, the applicant is bound to provide such services at the agreed upon rates. The Cost Centre C to G would form a composite supply as the supply involves supply of intermediate cars and also integration, commissioning etc. There would be supply of goods and supply of services involved in this activity and hence would form a naturally bundled supply - The supplies made by the applicant under Cost Centres C, D, E and G form a composite supply and since the supply of intermediate cars is the principal supply, would be treated as the supply of intermediate cars as per section 8 of the CGST Act, 2017 and section 12 of the CGST Act, 2017 is applicable to the issues related to the time of supply.
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