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2018 (4) TMI 810

on 2(30) of the CGST/WBGST Act, 2017? - Section 97 (1) of the GST Act - Held that: - The contract for the supply of a combination of UPS and battery, if not built as a composite machine, is not indivisible. The recipient can split it up into separate supply contracts if he chooses. The goods supplied in terms of such contracts are, therefore, no longer naturally bundled and cannot be treated as a composite supply. - If a combination of goods that does not amount to a composite supply is being offered at a single price, such supplies are to be treated as mixed supplies. Mixed supply is defined under section 2(74) of the GST Act as one where “two or more individual supplies of goods/services or any combination thereof, made in conjunction .....

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d 28/06/2017 (1125-FT dated 28/06/2017 of the WBGST Act, 2017; (hereinafter referred to as the State Tax ), as amended vide Notification No. 41/2017-Central Tax (Rate) dated 14/11/2017 (2019-FT dated 14/11/2017 of the State Tax) (hereinafter collectively referred to as the Rate Notifications on Goods ). Schedule Serial No. Tariff Head Description Remarks IV 138 8506 Primary cells and primary batteries Omitted w.e.f 15/11/17 vide Notification No. 41/2017-Central (Rate) dated 14/11/17 IV 139 8507 Electric accumulators, including separators, whether rectangular (including square) III 375 8504 Transformers Industrial Electronics; Electric Transformers; Static Convertors (UPS) III 376A 8506 Primary cells and primary batteries Inserted w.e.f 15/1 .....

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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 . Principal Supply is defined under Section 2(90) of the GST Act as the supply of goods/services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary . Note 3, therefore, is applicable, in this context, to composite machines. Other machines, designed for the purpose of performing two or more complementary or alternative functions, however, can be classified with the help of Note 3 only if they are naturally bundled and supplied in conjunction with one anot .....

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f the battery is not supplied or removed. It cannot function as a UPS unless the battery is attached. However, what needs to be considered is whether or not these two items are naturally bundled . The stated Illustration to Section 2(30) of the GST Act refers to a supply where the ancillary supplies are inseparable from the principal supply and form an integral part of the composite supply. Note 3 also refers to a composite machine as the one consisting of two or more machines fitted together to form a whole. When a UPS is supplied with built-in batteries so that supply of the battery is inseparable from supply of the UPS, it should be treated as a composite supply and as a composite machine in terms of Note 3. The UPS being the principal s .....

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ement and other goods and services supplied are inseparable in a contract for civil construction. The recipient has not contracted for the supply of steel, cement or architectural service, but for the service of constructing the civil structure, where all these supplies are inseparable and, therefore, naturally bundled. The contract for the supply of a combination of UPS and battery, if not built as a composite machine, is not indivisible. The recipient can split it up into separate supply contracts if he chooses. The goods supplied in terms of such contracts are, therefore, no longer naturally bundled and cannot be treated as a composite supply. 12. If a combination of goods that does not amount to a composite supply is being offered at a .....

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