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TMI Blog2019 (10) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Applicant to Volvo Sweden is a supply of services? (b) Whether the supplies by the Applicant amounts to export of services to Volvo Sweden and hence zero rated under GST law?. 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that he is a joint venture between the Vovo Group and Eicher Motors Limited and this joint venture has come into effect in July 2008. They are in the business of selling Volvo branded trucks and thereafter providing after sale support services, including warranty services for Volvo branded trucks and buses in India. b. He states that Volvo Sweden has appointed the applicant for the distribution of its products in India, including buses and trucks. The applicant sells its products with a standard warranty of 1 to 2 years, the cost of which is included in the cost of sale of such trucks or buses. The applicant is responsible for the servicing of warranty claims of its customers and the onus to reimburse such expenses incurred for discharging the warranty obligation lies with Volvo Sweden. In pursuance to this agreement, the applicant, on its own account or through its authorised dealers, has been engaging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urtherance of business; (iii) the activities specified in Schedule I, made or agreed to be made without a consideration; and (iv) the activities to be treated as supply of goods or supply of services as referred to in Schedule II..' b. that with respect to the transaction between the applicant and Volvo-Sweden, it is a supply of both goods and services by the applicant, for a consideration received from Volvo, Sweden and therefore qualifies as a supply under the GST Law. c. that as per Section 2(30) of the CGST Act "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. Further, it is submitted that Section 2(90) of the CGST Act defines 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. d. that in the instant case, the transaction is primarily a supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services, shall be the location where the services are actually performed. To apply the above provision, two components are provided viz., (1) the goods must be made available and (2) by the recipient of services, to the supplier of services. 7. The applicant states that the facts of the present case, the goods i.e., Truck, Bus, Construction equipment and penta engines are to be physically made available to the Applicant who is the supplier of services; however, such goods are made available by the customers (owners of such vehicles) and not by the recipient of services (i.e., Volvo Sweden). As the goods are not made physically available by the recipient to the supplier, the provisions of this Section for determination of place of supply based on making the goods physically available would not apply. 8. No other sub-rule is applicable for the facts of this case and hence, placing reliance on the default rule, the applicant submits that the place of supply of services provided by the Applicant is the location of the recipient of the services, which is Volvo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate and duly authorised representative of the applicant appeared for personal hearing proceedings held on 23.04.2018, reiterated the facts narrated in their application and also furnished a copy of written submissions. 13. FINDINGS & DISCUSSION: 13.1 We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made by Sri Shivadass, Advocate and duly authorised representative of the applicant during the personal hearing. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. 13.2 At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 13.3 The transaction of the applicant is examined and found the following: (a) The applicant has been appointed by M/s. Volvo Sweden for the distribution of its products in India and the applicant is selling the same either himself or through his dealers. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount from the payments to be made for the import of goods. It is also not clear as to how the dealers who have purchased the goods from the applicant would settle the consideration payable to the applicant using the credit notes which are issued by M/s. Volvo Sweden to them. (e) Hence the transaction is merely providing of warranty service by the applicant to the customers. What is sold by the applicant is a product and this product is a bundled with the service. What service executed by the applicant out of its resources is only serving the obligation to the customer and the customer is only interacting with the applicant and not with Volvo Sweden. The parts are replaced only when required and only those parts which are covered under the warranty claims and the service charges for fitting out such parts are claimed as reimbursements. (f) Section 7 of the CGST Act provides that "supply" which reads as follows: 'For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customer being the recipient of services, but the amount collectable from the customer is being paid by Volvo Sweden. This is clearly proved by the fact that M/s. Volvo Sweden is also issuing credit notes to the dealers of the applicant and not just to the applicant, if such service is provided by the dealers. 13.5 Even if we consider that the approval of the warranty claim is done by M/s. Volvo Sweden and the applicant carries out services and repair work only after such approval, then the applicant is providing services to the customer only as an agent of M/s. Volvo Sweden and the services are provided on the direction and on account of M/s. Volvo Sweden. Even then, it would be a supply transaction by the applicant to the customer for a consideration being paid by M/s. Volvo Sweden (being third party) by way of issuing credit notes to whoever provides such service on their behalf. 14. In view of the above, it is clear that the transaction is a transaction within the country and is a composite supply of goods or services to the customers by the applicant and hence does not amount to export of services as M/s. Volvo Sweden is not the recipient of services provided by the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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