TMI Blog2019 (8) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other local costs incidental to delivery . All of this together is used to arrive at the Unit Price per MT which is the bid price. Evaluation will take into account cost of inland transportation for delivery of goods to final destination. The bid and the agreements only mention a total quantity to be delivered in during the period in all destinations put together - The applicant cannot assign or sublet any portion of the contract whether it is manufacturing or delivery. Accordingly, the applicant in the have been transporting these products through goods carriage vehicle owned by them. Penalties are also prescribed for failure to deliver as indented with in the timelines specified. Thus any nonperformance on any component of the supply has penalties prescribed. As the entire supply of the food and delivery together is a composite supply, the transportation/ delivery alone is not a Goods Transport Agency service . Applicability of GST - supply of goods and transportation charge provided to an unregistered person - Rate of GST - Transportation charges for using the vehicles owned by the suppliers - natural bundling of services - HELD THAT:- The bid document clearly indica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct / TNGST Act 2017, within 30 days from the date on the ruling sought to be appealed is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. Shri. T.S. Kumarasamy, (Prop: M/s. CHRISTY FRIED GRAM INDUSTRY), A2 A3, Sidco Industrial Estate, Andipalayam Post, Thiruchengode taluk. Namakkal District 637 214, (hereinafter referred to the Applicant ), is engaged in manufacture and supply of Complementary Weaning Food containing Amylase Activity to the Department of Integrated Child Development Services, Government of Tamil Nadu. The applicant is registered under the GST Act with GSTIN.33ADOPK5292P1ZT. They have sought Advance Ruling on the following questions: 1) What is the rate of GST applicable for transportation of goods using the vehicle owned by the supplier for delivering the goods at the place as per direction of the ICDS Department and apart fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed for the complementary Weaning Foods includes the transport charges as per the agreement entered with the Department of Integrated Child Development Services. Hence they are collecting transport charges for the delivery of complementary weaning foods to the Anganwadi centre. They are having only one GSTIN: 33ADOPK5292P1ZT for all of their business activities including manufacture and supply of complementary Weaning Foods, transport charges received for delivery of the foods items and trading of other agriculture commodities like pulses, cereals etc., In this situation, they request clarification on the Rate of GST applicable for transport charges received for transportation of the above said food items through the vehicle owned by them. 2.3 The applicant stated that in respect of Supply using own vehicle they are of view that supply of goods and transport service are integral parts, even though invoices are raised separately for goods and transportation charges. Hence this transaction will be covered under composite supply and rate of GST for applicable for goods will be applicable for transportation charges. 3.1 The applicant was heard on 22.05.2019. The applicant appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No. 20/2017 -Central Tax (Rate) dt. 22.08.2017 with the Central Tax Liability of 2.5% (and State Tax of 2.5%) with no Input Tax Credit(ITC); and liability of 6% ( and State Tax of 6%) with full ITC with a condition that the goods transport agency opting to pay Central Tax @6% (and State Tax of 6%) under this entry shall, thenceforth, be liable to pay Central Tax @ 6%(and State Tax of 6%) on all the service of GTA supplied by it. The transport service provided by the taxpayer will come under GTA Service. GST, will be applicable for transportation of goods provided to an unregistered person and on the supply of goods appropriate GST will be applicable. Based on the transaction illustrated by the taxpayer/ applicant, the supply of goods and transportation of goods will not fall under the category of Composite Supply as it is not a natural bundle in as much as the transportation of goods, actually carried out by the taxpayer, can be provided by any person, i.e., by a consignor or consignee or by a GTA other than the consignor or consignee. 5. The State Jurisdiction Officer has offered their comments on the query raised by the applicant, which, is given belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at: It is floated by the Director cum Mission Director, Integrated Child Development Services Scheme, Tamil Nadu that it is for Supply of Complementary Weaning Food Containing Amylase Activity 2016-2019 . Para 9 on Bid price states that a price has to be indicated in the Price Schedules. In the Price schedules, price has to be indicated for each unit/ MT under the heads of Ex-factory/ Ex-warehouse Ex-showroom/ Off-the-shelf , Excise duty if any , Packing Forwarding , Transportation-Factory to Block/ Project , Transportation- Block/ Project to Center and Insurance and other local costs incidental to delivery . All of this together is used to arrive at the Unit Price per MT . As per Para 9(2) of the Bid Document, For evaluation, transportation charges will be included with the price of goods . The bidder s separation of price components will be solely for the purpose of facilitating comparison of bids by the purchase. As per clause 9(5) of the Bid Document Price quoted by the Bidder shall be fixed during the Bidder s performance of the Contract and not subject to variation on any account except changes in applicable statutory taxes and duties, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per bid document . The product is to be supplied as per the delivery terms in the bid document for ₹ 63900/- ( using open market wheat or ₹ 59,900/- (using BPL wheat) Unit Price per MT for 36 month from first supply . The unit price includes ₹ 2800/- per MT for transportation. The price is exclusive of applicable taxes and duties, if any. Supplemental agreement dt 01.12.2017 was executed to revise unit price per MT exclusive of applicable taxes. 6.3 The applicant submitted another tender / bid document dt 01.02.2019 where the terms and conditions have broadly remained the same. This led to an agreement dt 06.03.2019 in which the unit price is revised and is inclusive of ₹ 3400/- per MT for transportation and ₹ 2994/- per MT for 5% GST on food and transportation cost. 6.4 The applicant has further submitted that they are raising two invoices for supply of the product to the Anganwadi centers, one for the product and one against the Transportation Charges. They have submitted copies of the following two invoices for perusal: a. Inv.No. CWF 2/2019-20 Dt.30.04.2019 for ₹ 5931/- towards supply of 0. 100 Mts. Of the product, cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 From the submissions made by the applicant and documents submitted by them, it is evident that the applicant is awarded the contract to supply Complementary Weaning Food Containing Amylase Activity at the designated centers as specified in the bid document which are Anganwadi centers in various blocks in all districts of the state. The applicant is paid at Per MT price, which includes transportation charges. The Bid document clearly asks for a breakup of the bid price for each unit/ MT under the heads of Ex-factory/Ex-warehouse Ex-showroom/ Off-the-shelf, Excise duty if any , Packing Forwarding , Transportation- Factory to Block/ Project , Transportation- Block/ Project to Center and Insurance and other local costs incidental to delivery . All of this together is used to arrive at the Unit Price per MT which is the bid price. Evaluation will take into account cost of inland transportation for delivery of goods to final destination. The bid and the agreements only mention a total quantity to be delivered in during the period in all destinations put together. It does not specify how much amount will be delivered at what place. These details would be mentioned in separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a principal supply, shall be treated as a supply of such principal supply; 8.3 In the case at hand there are two supplies, one of supply of the food products and the other of supply of service of transporting the goods to the specified ICDS centers. Both of these supplies are taxable supplies for a consideration. To decide whether these two taxable supplies are naturally bundled, we have to examine the actual contract/ agreement. In this case, the recipient ICDS department intends to serve nutritious weaning food to children through the ICDS/Anganwadi centers all over the State. They could have procured the food from one supplier, aggregate all and then again distribute to each of these center using their own resources or a third party contractor for the same. However, in order to ensure quality and supply of food within prescribed time limits, they have chosen to keep the responsibility of the delivery to the supplier of the food himself. In this case, it eliminates further agreements and more importantly, ensures timely delivery of fresh and quality food. This would also give them the flexibility to get the right quantity to each center at the time of requirement. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or within such further period as the jurisdictional commissioner of the Central tax or jurisdictional commissioner of the State tax, or jurisdictional officer of the Union Territory Tax as the case maybe, may allow in this regard. The equivalent TN GST Notification is No. dt 17.10.2017. In the instant case, the Complementary Weaning Food Containing Amylase Activity is being distributed at ICDS centers free as per the Government scheme and the food is packed in units containers. The applicant has also produced certificates as per the conditions of this notification. Accordingly, the GST rate for the composite supply of Complementary Weaning Food Containing Amylase Activity at ICDS centers is 2.5% CGST and 2.5% SGST subject to fulfillment of the conditions of these notifications. This rate is applicable on the entire composite supply. In this event of it being a composite supply, the question of whether transportation of the food products is a Goods Transport Agency supply does not arise as once it is a composite supply there is no question of splitting it again and examining each of the taxable supplies separately. The applicant has asked a query whether it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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