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2019 (8) TMI 1283 - AAR - GSTRate of GST - transportation of goods using the vehicle owned by the supplier for delivering the goods at the place as per direction of the ICDS Department and apart from selling the goods as per contract entered with Department of Integrated child Development Services (ICDS), Government of Tamil Nadu - GTA service or not - transport service provided by them - HELD THAT:- It is evident that the applicant is awarded the contract to supply ‘Complementary Weaning Food Containing Amylase Activity’ at the designated centers as specified in the bid document which are Anganwadi centers in various blocks in all districts of the state. The applicant is paid at Per MT price, which includes transportation charges - The Bid document clearly asks for a breakup of the bid price for each unit/ MT under the heads of ‘Ex-factory/Ex-warehouse Ex-showroom/ Off-the-shelf, ‘Excise duty if any’, ‘Packing & Forwarding’, ‘Transportation- Factory to Block/ Project’, Transportation- Block/ Project to Center’ and ‘Insurance and other local costs incidental to delivery’. All of this together is used to arrive at the ‘Unit Price per MT’ which is the bid price. Evaluation will take into account cost of inland transportation for delivery of goods to final destination. The bid and the agreements only mention a total quantity to be delivered in during the period in all destinations put together - The applicant cannot assign or sublet any portion of the contract whether it is manufacturing or delivery. Accordingly, the applicant in the have been transporting these products through goods carriage vehicle owned by them. Penalties are also prescribed for failure to deliver as indented with in the timelines specified. Thus any nonperformance on any component of the supply has penalties prescribed. As the entire supply of the food and delivery together is a composite supply, the transportation/ delivery alone is not a "Goods Transport Agency service". Applicability of GST - supply of goods and transportation charge provided to an unregistered person - Rate of GST - Transportation charges for using the vehicles owned by the suppliers - natural bundling of services - HELD THAT:- The bid document clearly indicates that the bidder shall have the responsibility to deliver the specified quantities to all the centers. The bid price is also made inclusive of a fixed transportation charge instead of an actual basis. The applicant is also prohibited from assigning or sub lease any part of the contract including the delivery to a third party. The agreement signed and the invoicing also supports this. Therefore, in this case the supply of ‘Complementary Weaning Food Containing Amylase Activity’ is naturally bundled with the delivery at the designated centers as specified as per the bid and agreement and hence, this is a composite supply as per Section 2(30) of the CGST/TNGST Act 2017. The principal supply in this case is the supply of ‘Complementary Weaning Food Containing Amylase Activity’ as seen both in the bid document/ agreement and the pricing break up in that. Composite supply or not - section 8 of the CGST Act - supplier supplies the goods at the delivery point of the buyers and supplier raises invoice for the value of goods and transport charges separately as per the single contract/ purchase Order entered with the buyer - HELD THAT:- As per Section 8, the tax rate applicable to the principal supply is the rate applicable for such composite supply; therefore, in the case at hand, the tax rate applicable to the food products is the rate of tax for this composite supply. Notification No. 39/2017-Central Tax (Rate) dt 18.10.2017 notifies the central tax rate of 2.5 per cent on intrastate supplies of goods - In the instant case, the Complementary Weaning Food Containing Amylase Activity’ is being distributed at ICDS centers free as per the Government scheme and the food is packed in units containers. The applicant has also produced certificates as per the conditions of this notification. Accordingly, the GST rate for the composite supply of ‘Complementary Weaning Food Containing Amylase Activity’ at ICDS centers is 2.5% CGST and 2.5% SGST subject to fulfillment of the conditions of these notifications. This rate is applicable on the entire composite supply.
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