TMI Blog2020 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... ity via DG sets is a goods or service? - HELD THAT:- The DG set belongs to the Agilent Technologies, the maintenance charges are also borne by the Agilent Technologies, the expenses record pertaining to the DG set is also maintained by Agilent Technologies. Therefore, the authority has no hesitation in concluding that the provision of electricity supply/ power back-up via DG set is in the form of a service and not goods - the electrical supply is liable to GST to the extent it is supplied through DG set. Whether the supply of electricity and supply of utilities/leasing are separate supplies or composite supplies? - HELD THAT:- In the instant case, the supply is made by a taxable person and the number of supplies are also multiple. But as discussed earlier, the supply of electricity to the extent of it being supplied through grid is exempt from GST and, therefore, the condition of two or more taxable supplies is not satisfied. Further, the supply of utilities and supply of electricity are neither naturally bundled together nor are they supplied in conjunction with each other. Also, neither of the two supplies i.e. utility services and electricity supply can be termed as a princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement entitles the applicant to share the leased premises with its group companies, associates and affiliates, subject to obtaining prior written permission from Agilent and with prior written permission from the HSIIDC and other relevant authorities. 1.5 Further, the applicant has entered into 'Utilities Services Agreement' with Agilent on 25-8-2014, whereby Agilent has agreed to provide various utilities and services to the applicant as described in Schedule-I thereto, such as utilities at common area, facility management, technical services, landscaping, window cleaning, parking lot maintenance, pest control, trash removal, toilet supplies and cleaning, conference room set up, Government charges, waste water treatment, elevators, medical room, upkeep of gym, HVAC, etc. Copy of the Utilities Services Agreement is enclosed as Annexure-4. 1.6 Under the said agreement, Agilent has also agreed to supply electricity to the applicant and applicant has agreed to pay Agilent based on number of electrical units supplied as indicated by the meter(s) installed for the leased premises. Part-D of Schedule I provides for the formula to be applied for asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. (b) A mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. It has contended that the supplies provided under the agreement are separately identifiable and the invoices are raised accordingly and as such it does not qualify as a mixed supply as contained in Section 2(74) of the CGST Act. Section 2(74) reads : mixed supply means 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. 2.4 The applicant further refers to Section 2(30) of the CGST Act which reads : 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy for being a composite supply as defined in Section 2(30) of the CGST Act. 3. Classification of supply of electricity : 3.1 As per the applicant, the supply of electricity/ electrical energy is treated as supply of goods and intra-States supply thereof is exempt from payment of CGST in terms of Serial Number 104 of Notification No. 2/2017-C.T. (Rate), dated 28-6-2017. On this basis, it is of the opinion that the supply of electricity is exempt from payment of tax. 4. Eligibility for input tax credit : 4.1 In terms of Section 16(1) of the CGST Act, the applicant is entitled to take credit of input tax charged on any supply of goods or services to him, which are used or intended to be used in the course or furtherance of his business. 4.2 The applicant is exporter of services which is qualified as zero-rated supply under Section 16(1) of the IGST Act, and is entitled to credit of input tax as per Section 16(2) of the IGST Act. 4.3 The applicant has rented out premises from Agilent where it is exporting its services. Electricity is also supplied by the Agilent to the applicant The Agilent is chargi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grid supply and captive DG sets. However, metering of electricity supply via these two modes is done separately. The applicant has produced two types of sample tax invoices raised by the Agilent Technologies wherein Goods and Services Tax has been charged at 18% in both the invoices. The HSN / SAC Code mentioned in one of the Tax Invoice is 9972 12 for supply of renting services and 9972 21 for supply of electricity in other. However, the description of services mentioned in both of these sample invoices is Sundry Services. 6.2 Now, let us come to the legal provisions as contained under the Central Goods and Services Tax Act, 2017. It is also worth mentioning here that the provisions contained under the Central Goods and Services Tax and State Goods and Services Tax are identical and unless a special reference is made, the term GST signifies CGST/SGST Act. 6.3 Sale or consumption of electricity is a State subject mentioned at Serial No. 53 of List II of Seventh Schedule to the Constitution of India under Article 246 of the Indian Constitution. This position has not been altered by the 101st Constitution Amendment Act, 2016 and therefore, electricity remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onjunction with each other in the ordinary course of business,, one of which is a principal supply . 6.11 A thread-bare reading of this section highlights following important aspects :- (a) Supply is made by a taxable person. (b) The supply consists of two or more taxable supplies of goods and services or both or any combination thereof. (c) The constituent supplies are naturally bundled together and supplied in [conjunction] with each other. (d) One of the constituent supplies is a principal supply. In the instant case, the supply is made by a taxable person and the number of supplies are also multiple. But as discussed earlier, the supply of electricity to the extent of it being supplied through grid is exempt from GST and, therefore, the condition of two or more taxable supplies is not satisfied. Further, the supply of utilities and supply of electricity are neither naturally bundled together nor are they supplied in conjunction with each other. Also, neither of the two supplies i.e. utility services and electricity supply can be termed as a principal supply and the other one being a natural ancil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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