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TMI Blog2019 (7) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... s being under the "GST Act". * The issue raised by M/s. All Rajasthan Corrugated Board and Box Manufacturers Association, C-49, Industrial Estate, Baais Godown, Jaipur, Rajasthan 302006 (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97 (2) (a)(b)(d) given as under : a. Classification of any goods or services or both; b. Applicability of a notification issued under the provisions of the act; d. Admissibility of input tax credit of tax paid or deemed to have been paid; * Further, the applicant being a registered person (GSTIN is 08AAHAA0728P1ZH as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling. 1. SUBMISSION AND INTERPRETATION OF THE APPLICANT: a. The applicant is an association having its office in Jaipur (Rajasthan) duly registered under the provisions of the Central Goods and Services Tax Act 2017 read with the provisions of the Rajasthan Goods and Services Tax Act 2017. b. That applicant is engaged for the up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. * If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. * Other illustrative indicators, not determinative but indicative of bundling of services in ordinary course of business are - a. There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. b. The elements are normally advertised as a package. c. The different elements are not available separately. d. The different elements are integral to one overall supply if one or more is removed, the nature of the supply would be affected. That above indicators being applied in the given case, it evidently appears that the supply made by the applicant to the delegates is a composite supply. i. Further, principal supply is defined as under: "principal supply" means the supply of goods or services which constitutes the predom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y tax at the rate of 18%. m. Those categories of brand promotion packages will be offered in the following ways: * Branding on Stage Backdrop, Standy, Taxi, E-Rickshaw, Chair Head, Rest Cover, Itineary, Bottle Wrapper, Logo in media Stationery * Display of their brand in a souvenir for the event (space will be allotted in the souvenier) * Presentation (for a specific time slot) and DVD Display That the term 'brand promotion' in not defined under GST but reference can be made to service tax regime where service of brand promotion was a declared service and it was covered under Section 65(105) (zzzzq). Brand promotion packages offered by the applicant should be classified under HSN 998397 having description 'Sponsorship services and brand promotion services' taxable at the rate of 18%. 356 Group 99839 Other professional, technical and business services 363 998397 Sponsorship services and brand promotion services 18 Section 8 Business and Production Services 21 Heading 9983 (Other professional technical and business services) (i) Selling of space for advertisement in print media. 2.5 - (ii) Other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NS ON WHICH THE ADVANCE RULING IS SOUGHT I. What shall be the nature of service and classification in accordance with Notification No. 11/2017- CT(R) dated 28.06.17 read with annexure attached to it in relation the following services: a) Service provided by the applicant to the delegates. b) Service provided by the applicant to the exhibitors. II. In relation to the brand promotion packages offered by the applicant in the course of the event, a) What shall be the nature of service and classification in accordance with Notification No. 11/2017-CT(R) dated 28.06.17 read with annexure attached to it? b) Whether the applicant is liable to pay tax on services provided to the brand promoters or the liability to pay tax on such services falls on recipient under reverse charge according to Notification No. 13/2017 - Central Tax (Rate)? III. Whether Input Tax Credit is admissible for the applicant in respect of tax paid on the following: a) Services provided by the hotel including accommodation, food & beverages. b) Supply of food and beverages by outside caterers c) Services provided by event manager like pickup & drop, exhibition stall setup, tenting, etc. V. PERSONAL HE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the above mentioned facilities or services are given in a package thus a kind of bundled services are being offered to the delegates. d. The concept of 'composite supply' under GST Act, 2017 is as follows: (30) "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; * As per the definition, the essential conditions for a supply to qualify as composite supply can be highlighted as under: a. 2 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. d. One taxable supply should be a principal supply. * Other illustrative indicators, not determinative but indicative of bundling of services in ordinary course of business are - a. There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. b. The elements are norm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces 448 998594 Combined office administrative services 449 998595 Specialised office support services such as duplicating services, mailing services, document preparation and the like 998596 Events, exhibitions, conventions and trade shows organisation and assistance services. 451 998597 Landscape care and maintenance services 452 998598 Other information services nowhere else classified 453 998599 Other support services nowhere else classified Notification No. 11/2017 - Central Tax (Rate) 23 Heading 9985 (Support services) (i) Supply of tour operators services.- Explanation "tour operator" means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged m the business of operating tours. 2.5 1. Provided that credit of input tax charged on goods and services used in supplying the service [, other than the input tax credit of input service in the same line of business (i.e. tour operator service procured from another tour operator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a brand of goods, service event or endorsement of name, including a trade name, logo or house mark of a business entity by appearing in advertisement and promotional event or carrying out any promotional activity for such goods, service or event. Explanation- For the purposes of this sub-clause, "brand" includes symbol, monogram, label, signature or invented words which indicate connection with the said goods, service, event or business entity. m. In view of above, brand promotion packages offered by the applicant should be classifiable under HSN 998397 having description 'Sponsorship services and brand promotion services' taxable at the rate of GST (SGST 90/0+ CGST 9%). Annexure 356 Group 99839 Other professional, technical and business services 357 998391 Specialty design services including ulterior design, fashion design, industrial design and other specialty design services 358 998392 Design originals 359 998393 Scientific and technical consulting services 360 998394 Original compilations of facts or information 361 998395 Translation and interpretation services 362 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Availability of conference hall * Food & beverages The above bundle of services shall qualify as a composite supply by the hotel where accommodation service shall be the principal supply since it is the predominant element of supply made by the hotel. According to Section 8 of GST Act, 2017 such composite hotel shall be treated as supply of accommodation service (accommodation being the principal supply). o. Input Tax Credit of CGST and SGST charged by the hotel on the composite supply of accommodation service shall be available to the applicant since such supply will be used in the course of business and it is an eligible credit in terms of Section 16 of GST Act, 2017. P. To determine input tax credit on food and beverages supplied by outside caterers, Section 17 (5) of GST Act, 2017 (as amended) provides as under:- (5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection (1) of section 18, input tax credit shall not be available in respect of the following, namely: - (b) the following supply of goods or services or both- (i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice provided by the applicant to the delegates and exhibitors is a composite supply and classifiable under Service Code 998596 having Service description "Events, exhibitions, conventions and trade shows organizations and assistance services" as per Annexure: Scheme of Classification of Services to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017(as amended from time to time). II. The service of brand promotion packages offered by the applicant in the course of the event is a composite supply and classifiable under Service Code 998397 having Service description "Sponsorship services and brand promotion services" as per Annexure: Scheme of Classification of Services to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) . The applicant is liable to pay GST on service of brand promotion and not covered under reverse charge mechanism. III. Input Tax Credit is admissible to the applicant in respect of tax paid on the following:- a) Services provided by the hotel including accommodation, food & beverages. b) Supply of food and beverages by outside caterers c) Services provided by event manager like pickup & drop, exhibition st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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