TMI Blog2018 (10) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... te should be applicable? In case of the said contract, what is the relevant place of supply and type of tax which needs to be discharged (i.e. CGST & SGST or IGST)? Held that:- The said contract merits to be considered to be a composite supply of service and principal supply is service inasmuch as the supply of goods is merely incidental to the maintenance contract in the given facts and circumstances - In terms of Section 8 of the CGST Act, 2017 / SGST Act, 2017, it has been clarified that a composite supply comprising two or more supplies, one of which is a principal supply would be treated as supply of such principal supply. The essential conditions for a supply to qualify as composite supply can be highlighted as: a. Two or more taxable supplies of goods or services or both; b. The taxable supplies should be naturally bundled; c. The taxable supplies should be supplied in conjunction with each other; and d. One taxable supply should be a principal supply - In such case, the supply which is the principal supply is treated as the main supply and the entire transaction should be eligible to GST as per the principal supply. Where the service provider and service recipi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng GSTN : 09AAGCG1589HIZA. 2. The applicant is engaged in the business of import and manufacture of rail locomotive engines for supply to Indian Railways. The applicant had made a bid for a tender floated by the Indian Railways for supply of locomotive engines and their comprehensive maintenance. In pursuance to the bid, the applicant has been awarded a contract by President of India represented by Director, Mechanical Engineering (Works), Ministry of Railways ('Indian Railways') Government of India for setting up of factory at Bihar for assembly/ manufacture of locomotives for supply to Indian Railways and comprehensive maintenance of said rail locomotives. 3. The applicant in this application dated 15-2-2018 has raised following issues for determination by the Authority - (a) Whether supply of comprehensive annual maintenance service which may also involve incidental supply of spare parts/ goods should be classified as a composite supply or mixed supply? (b) In case the said contract is considered as composite supply, what is the principal supply between goods or services? (c) In case goods are considered as principal supply, how the taxability should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per Section 2(74) of the CGST Act, 2017/SGST Act, 2017 has defined the term 'mixed supply' to mean - two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply Illustration - A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately. Further, Section 2(90) of the CGST Act, 2017 /SGST Act, 2017 has defined the term 'principal supply' to mean - the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary . The said contract merits to be considered to be a composite supply of service and principal supply is service inasmuch as the supply of goods is merely incidental to the maintenance contract in the given facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equipment is 998714 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. Where the service provider and service recipient of a service are located in India, the provisions of Section 12 of the of IGST Act, 2017 determine the place of supply of services. Sub-section (10) of Sec. 12 ibid enjoins that place of supply if service on-board a train shall be the first scheduled points of departure of the convenience. If the location of the supplier and place of are not in the same State or Union territory, it shall be treated as inter-State supply of Services and IGST shall be levied, otherwise CGST SGST shall be levied. If the supply of services is not made on-board a train, the location of a registered service recipient shall be the place of supply of service as per Section 12(2) ibid. 11. The jurisdictional Commissioner, CGST i.e. the Commissioner, CGST CX, Lucknow has also submitted views on the above said Advance Ruling application which are as under - The activity of the party is a supply of service and principal supply of service inasmuch as the supply of goods is merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at tax rate should be applicable? Ans . - The Service Code for the maintenance and repair service of transport machinery and equipment is 998714 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. (e) In case of the said contract, what is the relevant place of supply and type of tax which needs to be discharged (i.e. CGST SGST or IGST)? Ans . - Where the service provider and service recipient of a service are located in India, the provisions of Section 12 of the IGST Act, 2017 determine the place of supply of services. Sub-section (10) of Sec. 12 ibid reads as under - The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey. 14. Sub-section (10) of Sec. 12 ibid enjoins that place of supply if service on-board a train shall be the first scheduled point of departure of the convenience. If the location of the supplier and place of service are not in the same State or Union territory, it shall be treated as inter-State su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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