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2018 (11) TMI 1348 - AAR - GSTClassification of supply - composite supply or mixed supply - maintenance services rendered on customers’ equipment under the two agreements i.e. comprehensive maintenance services agreement and supply of parts and services agreement which also includes supply and replacement of spare parts - principal supply between goods and services - rate of GST - relevant place of supply - type of tax which needs to be discharged. Held that:- The Applicant is a multiproduct, multi-division entity, engaged in manufacturing, distribution and sales agency activities of various industrial products which include metal cutting tools, mining/construction equipment, spares for mining equipment, seamless stainless steel tubes and pipes and wires and heating systems. Further, the Applicant is also engaged in the business of after sales support services for the mining equipment manufactured by its overseas group entities which are imported by the customers into India. The maintenance services rendered on customers’ equipment - Held that:- The applicant can supply the parts or services individually or any combination thereof on a single price which is appropriately covered under mixed supply - the contention of the applicant regarding “Comprehensive Maintenance Contract”, that the services would be classifiable under the Composite Services, we are of the view that Services supplied under the said contract are to be treated as composite services and the tax rate applicable on the principle supply would also be applicable on the other services. Principal supply between goods and services - Held that:- The consumption of goods vary substantially depending on the wear and tear of the equipment, however the consumption of services which would be critical may not vary substantially as these engineers would be stationed at the mine site and accordingly perform maintenance activities on the equipment at regular intervals. Therefore, the predominant element in the composite supply would be provision of maintenance services and the supply of goods would be ancillary to such services - the supply of maintenance services should be considered as the principal supply and the supply of other goods or services shall be ancillary to such principal supply. Rate of GST - Held that:- The service code for Maintenance and repair services of commercial and industrial machinery is 9987171 and the prescribed rate of GST is (CGST @ 9% of the taxable value, SGST @ 9% of the taxable value) or IGST @ 18% of the taxable value. Relevant place of supply - type of tax which needs to be discharged - Held that:- The determination of place of supply as requested by the applicant cannot be decided by the authorities for Advance Ruling constituted under Section 96 of SGST Act, 2017. The Authority constituted under the said section can determine or pronounce Advance ruling only on the issues specified under Section 97 (2) of CGST/SGST Act, 2017 and determination of place of supply has not been specified under Section 97 (2). In view of above we are not giving any finding in respect of place of supply. Ruling:- The activities performed under the ‘Comprehensive Maintenance Contract’ are to be treated as a composite supply of services and the activities performed under ‘Equipment Parts Supply and Services Agreement’ are to be treated as Mixed Supply. In respect of the activities performed under ‘Comprehensive Maintenance Contract’, the supply of Operation & Maintenance services is the principal supply and the supply of other services are ancillary to such principal supply. The service code for Maintenance and repair services of commercial and industrial machinery is 9987171 and the prescribed rate of GST is 18% (CGST @ 9% of the taxable value, SGST @ 9% of the taxable value) or IGST @ 18% of the taxable value. For the supply of mixed services, the applicant is liable to pay the highest rate of tax as per Section 8(b) of the CGST Act, 2017.
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