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2022 (5) TMI 531 - AAAR - GSTClassification of goods - rate of GST - sale of solar energy products as Solar Water pumping system as a whole - sale of one of the products on standalone basis - sale of the products under various combinations to be undertaken by them and supply of parts of the system along with installation - HELD THAT:- There are clear provisions in the GST Act itself as regards “composite supply” as defined under Section 2(30) and “mixed supply” under Section 2 (74) of CGST Act, 2017 which deal with situations where supply consisting of two or more taxable goods or services or both is involved. In this regard, the appellant’s primary contention is agreed to the effect that without applying and refuting the applicability of “composite supply”, conclusion regarding mixed supply cannot be reached. Accordingly, it is found appropriate to examine the matter with reference to the concept of “composite supply” in order to reach a logical conclusion. As per Section 2(30) of the CGST Act, 2017 “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. An illustration provided under the said definition provides that “where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply - it is obvious that the supply of packing material, supply of service of insurance or transport is not independent of the supply of goods. Hence, the transportation of goods, supply of packing material and insurance are covered by the definition of “composite supply” with the supply of goods which is a principal supply in the illustration. The supply of different type of items such as Solar Panel, Controller, Solar Pump or Structure in different possible combinations, if any, without anyone of the goods being supplied as principal supply would be covered by the definition of “mixed supply” of different type of goods - In the instant case the appellant is obliged to supply a complete solar water pumping system alongwith the service of its installation and commissioning and, therefore, it would be appropriate to analyze the relevant notifications. On careful consideration of the relevant entries of the notifications, we find that Solar Energy based bore well water pumping system as a whole (hereinafter also referred to as “the System”) as proposed to be supplied by the appellant qualifies as ‘Solar Power based devices’ mentioned under entry No. 234 of Notification No. 01/2017-Central Tax (Rate), dated 28.06.2017 as the same is a device based on solar power used for pumping, water. Further, services by way of installation and commissioning of solar power based devices are governed by entry No. 38 of Notification No. 11/2017-Central Tax. (Rate), dated 28.06.2017. The effective rate of GST on supply of Goods and Services in relation to the Solar Power Based Devices upto 30.09.2021 is as follows:- (a) 5% on value of goods where the value of goods is to be taken as 70% of the gross consideration arid (b) 18% on the value of services where the value of services is to be taken as 30% of the gross consideration. Hence, the effective rate of GST for the composite supply will work out to 8.9% [(5% x 70%) plus (18% x 30%)]. However, with the amendments effected vide Notification No. 06/2021-Central Tax (rate) dated 30.09.2021 and Notification No. 08/2021-Central Tax (rate) dated. 30.09.2021, the rate of tax on goods portion stands increased from 5% to 12% and accordingly, the effective rate of GST for the-period post 30.09.20121 will stand increased to that extent.
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