TMI Blog2021 (1) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of goods or services or both, within the meaning of that term. The very purpose of the Board for making the provision of Advance Ruling in the CGST Act, 2017 is to help the applicant in planning his activities which are liable for payment of GST. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities. Further, it helps in avoiding long drawn and expensive litigation at a later date. Seeking an advance ruling is inexpensive and the procedure is simple and expeditious. It thus provides certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration. In the present case, the applicant has asked hypothetical questions seeking Advance Ruling on an issue which has not materialised till date. We find that a period of nearly one year has lapsed after the filing of the application of Advance Ruling by the applicant (which was filed on 13.10.2019) but the agreement which they were supposed to make with the so-called Rice exporter has not materialised so far i.e. no agreement has been signed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age, whether such supply would be treated as Mixed supply as per the provisions of Section 2(74) of the CGST Act, 2017, since the services are not naturally bundled and are capable of being provided independently? Or it shall be treated as Composite supply ? (2) What shall be the applicable HSN code and corresponding GST Rate for such bundle of services?(Highest Rate of Service in the bundle is 18%). (3) Whether the firm shall be eligible to avail ITC on the following: -Regarding GST paid on Commercial vehicles Repair maintenance cost of such vehicles used for transportation of goods/containers. -ITC on inward supply from CFS/Port/Labour contractor etc. related to such packaged outward supply. (4) Whether the Exporter client shall be eligible to claim refund of the GST paid by them on our outward supply invoices? 3. The applicant has submitted that they are going to be engaged in providing service like air freight forwarding and shipping service, packaging and transportation services (domestic), truck transport service and bus transport etc. The detailed description of the services provided by the applicant, as relevant for this view point is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect services in the agreement, few services are liable to tax and the remaining few are exempt under GST, for instance, the service pertaining to clearing and forwarding of cargo is liable to tax at rate of 18% in view of entry no.11(2) of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017, whereas services provided by a goods transport agency, by way of transport in a goods carriage of agricultural produce is liable to NIL rate of tax in terms of Sr.No.21 of the Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 and so on. 5. The applicant has submitted his view-point in respect of Question-1 raised by him seeking Advance Ruling, as under: (1) If we want to provide all above services for a Single consolidated Rate as a package, whether such supply would be treated as Mixed supply as per the provisions of Section 2(74) of the CGST Act, 2017, since the services are not naturally bundled and are capable of being provided independently? Or it shall be treated as Composite supply ? Section 2(30) of the CGST Act, 2017 defines composite supply as under: 2(30) composite supply means a supply made by a taxable person to a recipient consisting of tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant extract of the decision is extracted hereunder for ready reference: 60.... (1) Every supply must normally be regarded as distinct and independent, although a supply which comprises a single transaction from an economic point of view should not be artificially split. (2) The essential features or characteristic elements of the transaction must be examined in order to determine whether, from the point of view of a typical consumer, the supplies constitute several distinct principal supplies or a single economic supply. (3) There is no absolute rule and all the circumstances must be considered in every transaction. (4) Formally distinct services, which could be supplied separately, must be considered to be a single transaction if they are not independent. (5) There is a single supply where two or more elements are so closely linked that they form a single, indivisible economic supply which it would be artificial to split. (6) In order for different elements to form a single economic supply which it would be artificial to split, they must, from the point of view of a typical consumer, be equally inseparable and indispensable. (7) The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case. Further, the rates for individual services cannot be estimated as well; that in their opinion, the supply of subject services should be treated as mixed supply whereby various services which are not naturally bundled are provided for a single rate; that the Advance Ruling Authority, Maharashtra in the case of M/s. Lindstorm Services India private limited, 2018 (12) TMI 1275 AAR, MAHARASHTRA , decided the question of what would be the nature of the supply vis-a-vis composite or mixed supply in case of renting of work wear along with other services such as transportation, weekly washing etc. when provided for a single consideration. The AAR, Maharashtra ruled that the supply of renting of work wear along with other services such as transportation, weekly washing etc. for a single consideration is a mixed supply under Section 2(74) of the CGST Act by observing as follows: 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. Illustration .- A supply of a package consisting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of service would be of the supply which attracts the highest rate of tax; that the subject supply would be supply of service as one of the constituent supply under the agreement which attracts highest rate of tax is clearing and forwarding service vis-a-vis 18% of GST; that the entire supply would be classified as supply of service liable to tax at the rate of 18%; that 18% is the standard maximum rate of tax applicable to any supply of service under GST; that the subject supply includes other services too which individually attracts 18% rate of GST; that, the remaining list of services need not be checked for determining the highest rate of tax and accordingly determining the supply; that in the present case, the mixed supply, involving supply of a service liable to tax at higher rate than any other constituent supply of service as involved would qualify as supply of services and accordingly, the provisions relating to time of supply of services would be applicable. Issuance of invoice: Section 31(2) of the CGST Act(relevant extract) reads as under: 31. (2) A registered person supplying taxable services shall, before or after the provision of service but wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm; that in the present case, it is already concluded the subject supply pertains to services; that since it is a combination of services including transportation of cargo, handling of the cargo and obtaining all documents related to export of the cargo, etc., the service accounting code as per the scheme of classification adopted under GST law would be 999799 bearing the description other services nowhere else classified under the group 99979 vide description of Other miscellaneous services; that the applicant would be mentioning in the invoice the description of the services as provided, the same would be only for identification purposes with regards to the work done; that the accounting code for services would remain the same as 999799 and tax shall be discharged at the rate of 18% in terms of Sr.No.35 of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017. 7. The applicant has given his view point in respect of Question 3 raised by him seeking Advance Ruling, as under: Section 16(2) of the CGST Act shall be relevant and the same is extracted as under: 16(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt under the GST law; that if the applicant would have made individual supplies which are exempt under GST, the input tax credit pertaining to such individual/separately identifiable supply would be subject to restriction; that in the present scenario, the supply is a mixed supply whereby two or more supplies are bundled and provided against one single consideration hence the supplies which otherwise would have enjoyed exempt status have been supplied on payment of tax, therefore, the provision under Section 17(2) of the CGST Act would not be applicable in the present case and hence the applicant would be eligible to avail the entire input tax credit for the subject supply which consists of exempt supplies as well as the same have been made on payment of applicable GST i.e. 18%. 8. The applicant has submitted his view point in respect to Question 4 raised by him seeking Advance Ruling, as under: The applicant has submitted that as already provided in reply no.3, they are not going to be engaged in providing any exempt supply in individual capacity and the subject supply is a mixed supply provided against single consideration; that once, it is concluded that the subject su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. 11. As per the submission of the applicant, they are in process of entering into an agreement with a specific client engaged in the business of Export of Agricultural produce(Rice) and the services to be provided by the applicant comprise of the following broad categories for which they wish to quote a single consolidated rate(per container) towards the said bundle of services, hence they are seeking clarification as to the classification of services, applicable HSN and rate of GST to be charged: (1) Clearing and Forwarding Agency Charge(CHA License is in the name of a sister concern M/s. SRS Cargo). (2) Providing labour for loading of cargo into containers. (3) Allied services for export and import cargo like: -Lift On/Lift off charges to CFS/Empty Container Yard. -Survey Tally formality for goods loaded in the container. -Obtaining Custom Permission for Self-Sealing. (4) Transportation of cargo/containers from factory/warehouse to CFS/port: -Transportation of Agricultural pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought under this Act, shall be in respect of, (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 14. From the above we find that the provisions for seeking Advance Ruling made under the Act is limited to the activities conducted by the applicant only and is for the purpose of clarifying issues such as classification of the supply of goods/services provided by them, their GST liability if any, applicability of a notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that without any agreement or any other relevant documents having been provided by the applicant in the instant case, it would not be possible for us to give a decision in the said matter. In view of the above facts, we don t find it necessary to go into the details of the issue in hand as well as the hypothetical/speculative questions raised by the applicant for seeking Advance Ruling. 15. In light of the foregoing, we rule, as under R U L I N G Question-1: If we want to provide all above services for a Single consolidated Rate as a package, whether such supply would be treated as Mixed supply as per the provisions of Section 2(74) of the CGST Act, 2017, since the services are not naturally bundled and are capable of being provided independently? Or it shall be treated as Composite supply ? Answer : In view of non-submission of copies of agreement or any other relevant documents with regard to the services to be supplied/provided by the applicant M/s. Shree Arbuda Transport, Gandhidham, no decision can be taken in the matter for the reasons discussed hereinabove. Question-2: What shall be the applicable HSN code and corresponding GST Rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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