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TMI Blog2021 (1) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 products: like Rice, tea etc. -Transportation of empty container from CFS/Empty container yard to party warehouses in various locations. (5) Obtaining custom related certificates/clearing: like Bill of Lading, Health Certificate, Non GMO, Pytho etc. with complete documentation for export shipment. 2. The applicant wishes to quote a single consolidated rate(per container) towards the above bundle of services, hence they are seeking clarification as to the classification of services, applicable HSN and rate of GST to be charged. The applicant has asked the following question seeking Advance Ruling on the same: "(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 servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by applicant's sister concern. ii. Transportation of cargo from the factory to the desired location visa-vis CFS/Port etc. iii. Loading and unloading the cargo into containers with the help of the labourers and equipments. iv. Transportation of empty container from CFS/empty container yard to client's warehouse at various locations. v. Other allied services like: -life on/lift off charges to CFS/empty container yard. -survey tally formality for goods loaded in the container. -obtaining custom permission for self-sealing. vi. Obtaining custom related certificates/clearings such as bill of lading, health certificate, Non GMO, python, etc. with complete documentation for export shipment. 4. The applicant has further submitted that in terms of the agreement, a single rate is to be fixed based on per container for providing all types of above mentioned varied services. The agreement is to stipulate no separate rate for the provision of the subject individual services. Out of all the subject 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 lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice where such supply does not constitute a composite supply. Illustration.- A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately; 5.3 Thus for a supply to qualify as 'mixed supply', a crucial condition is that it should be supplied for a single price. In the present case, the supply of subject services in the agreement is made for a single price. The United Kingdom Upper Tribunal (UT) in the case of Honorable Society of Middle Temple v/s. Revenue and Customs Commissioners(2013) UKUT 0250(TCC) gave certain indicative guidelines to determine whether two or more supplies constitute a 'single supply' (composite supply) or 'multiple supplies'(independent supplies) in context of the UK law. The 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 ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customer for each supply of service. Intention of the supplier and recipient: The customer may choose to avail the subject services as per their own requirements. In other words, the customers may choose to procure any combination of supply of service from the applicant. This could be considered as a test as it would reveal what the applicant intends to supply, and what the recipient intends to receive vis-a-vis though can be supplied together. Such element also explains the economic rationale behind the supply. Description on the invoice: The applicant has to raise fixed rated consolidated invoice for supply of services and not to provide an item-wise/service wise bifurcation. 5.5 The applicant has stated that the above facts indicate that the intention of the applicant is to make supply of services for a single price under the agreement. No individual service is provided in the present 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em and output tax due can be easily calculated; that, in the present case, there is a mixture of taxable and exempt supply which could lead to problem; that definition of mixed supplies provides for the phrase "two or more individual supplies of goods or services, or any combination thereof"; that unlike the definition of composite supply, which includes only 'taxable supplies", the definition of mixed supply has wide scope as it means to include supplies vis-avis taxable or exempt both; that in view of the above, they are of the view that the subject services including taxable as well as exempt supplies would qualify as mixed supply in terms of Section 2(74) of the CGST Act. 6. The applicant has submitted his view point in respect of Question 2 raised by him seeking Advance Ruling, as under: The applicant has submitted that the rate of tax of the subject supply 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discount or abatement, if any; (10) Rate of tax and amount of tax (central tax, State tax, integrated tax, Union territory tax or cess); (11) Place of supply along with the name of the State, in the case of a supply in the course of inter-State trade or commerce and address of delivery where the same is different from the place of supply. (12) Whether the tax is payable on reverse charge basis; and (13) Signature or digital signature of the supplier or his authorised representative. 6.2 The applicant has stated that as provided in above paras the subject supply pertains to supply of service liable to tax at the rate of 18%; that in terms of Section 8(b), the rate of tax is determined based on such supply which attracts highest rate of tax amongst all the supplies which are provided in mixed form; 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed. 7.2 The applicant has submitted that in the present case, they fulfil all the above referred conditions and thus render themselves eligible to avail the input tax credit with regards to the inward supplies procured for making the subject outward supply; that they are specially concerned about the fact that whether the input tax credit attributable to such supplies which are exempt under GST law will be disallowed to them in view of the fact that the subject supply under the agreement consists of few exempt supplies; that in terms of Section 17(2) of the CGST Act, the input tax credit attributable to the exempt supplies is restricted and made liable for reversal; that in the present case, the applicant is not rendering any individual supply which is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit at the end of any tax period in case where the registered person makes zero-rated supply without payment of tax. DISCUSSION & FINDINGS: 9. We have considered the submissions made by the applicant in their application for advance ruling, additional submissions made by them dated 19.08.2020 as well as the arguments/discussions made by their representative Shri Hemen Furiya, C.A. at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 10. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 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 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 quo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of personal hearing by the representative of the applicant, it appears that the issue brought before us by the applicant has not yet materialised so far i.e. the application for Advance Ruling has been filed on 13.10.2019 but no agreement has been reached so far by the applicant with the exporter of rice (referred to by them) after nearly a year of filing of the application. Looking to the questions asked by the applicant, we feel the need to thoroughly go through the provisions of Section 97 of the CGST Act, 2017 which reads as under: "97. (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and 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) determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Advance Ruling Authorities to answer or to decide on such hypothetical questions like whether five different services likely to be provided by the applicant in the future, if provided for a single consolidate rate would be mixed supply or composite supply, the HSN of the said supply, whether the firm would be liable to avail ITC or not or whether exporter client shall be eligible to claim refund of GST paid on their outward supply invoices simply on the basis of some details provided in writing by the applicant on a deal or agreement which has not materialised so far and which may or may not materialise in the future. We are, therefore, of 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 Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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