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2019 (10) TMI 564 - AAR - GSTClassification of supply - supply of goods or services - selling Volvo branded trucks to Volvo Sweden - export of services - zero rated supply or not? - HELD THAT:- The applicant is not charging the customer any amount because of a clear commitment from M/s. Volvo Sweden that the amount spent for the parts and services involving the parts are going to be reimbursed by M/s. Volvo Sweden. In case of any parts or services which are provided to the customers which are not part of the warranty services, then such amounts are charged to the customers by the applicant or his dealers. Since the amount is paid M/s. Volvo Sweden, in monetary terms by issuing credit notes, the “consideration” covers this amount and it is immaterial who makes the payment. Hence there is a supply of parts and services to the customers for consideration and amounts to a supply transaction with the applicant being the supplier and the customer being the recipient of services, but the amount collectable from the customer is being paid by Volvo Sweden. This is clearly proved by the fact that M/s. Volvo Sweden is also issuing credit notes to the dealers of the applicant and not just to the applicant, if such service is provided by the dealers. The transaction is a transaction within the country and is a composite supply of goods or services to the customers by the applicant and hence does not amount to export of services as M/s. Volvo Sweden is not the recipient of services provided by the applicant, but only pays the consideration to the provider of such services. The applicant is providing composite supply of goods and services to the customers where in the principal supply is that of goods or services depending on the nature of individual case - The transaction is an intra-State or inter-State transaction (but not export transaction) depending on the place of supply - Since this transaction is not an export of services, the transaction is not a “Zero-rated Supply” under the IGST Act.
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