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TMI Blog2023 (12) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... to as 'appellant' or "REL") against the Advance Ruling No. RAJ/AAR/2021-22/35 dated 28.12.2021. The appellant has filed appeal on 27.01.2022 online & also submitted hard copy in this office on 31.01.22. The requisite Fee of CGST Rs. 10000/- and SGST Rs. 10000/- has, been paid vide Challan dated 25.01.2022. 3. The appellant, M/s Resonance Edventures Limited is a company registered under the Companies Act, 1956. They are inter alia engaged in the business of imparting coaching to students aspiring for admission into various engineering and medical colleges in India. BRIEF FACTS OF THE CASE 4.1 The appellant is registered under Goods and Services Tax with Registration Number 08AADCR5581MIZT dated 01.07.2017 under the categories of "Commercial Training or Coaching Centre Services" and "Advertising Agency's Services". 4.2 The appellant have been providing coaching services under the physical/classroom mode but due to Covid environment, they shifted their business model through remote channel partner network. According to the appellant their business model in brief is as under: 1. The appellant provide coaching services to enrolled students under their supervision through Network ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v) Providing facilities and infrastructure for smooth conduct of courses such as AC class rooms, black/white board, drinking water, furnished Computer lab, staffroom, supporting staff etc. (vi) Offering fee discount as per Resonance policy. (vii) Marketing of courses. (viii) Providing premises/campus as per requirement. (ix) Local advertisements B. Obligations of the appellant : (i) Facilitate/assist in appointing the faculty, academic man power in consultation and approval of the network/channel partner. (ii) Preparing and providing- (a) high quality printed study materials, (b) soft copy of examination papers, (c) soft copy of course planners, and (d) soft copy of annual schedule or any changes in any of the above papers. (iii) To provide 'Student Kit' and all other committed deliverables to all registered students (iv) Communicating in time, any changes in any of study material, student kits, examination papers, course planners, and annual schedule or any changes in any of the above (v) Deciding schedule of courses, schedule of methods of teaching, training/coaching and education to the students, undergoing training/coaching with the objective of not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90) of CGST Act, 2017? Ans. In the present case, the supply is a mixed supply of goods as well as services under Section 2(74) of GST Act, 2017 and attracts highest rate of tax g 18% (i.e. 9% CGST+ 9% SGST or 18% in case of IGST). Q.3: Applicant provides coaching services under a new business model through channel / Network Partners as per sample agreements provided, containing obligations of applicant (REL) and such channel / Network partners. According to agreement, the channel / network partner provides the services to the students on behalf of applicant. In such a situation, who shall be considered as supplier of coaching (REL) service and recipient of such service under the agreement? Ans. In the present case, applicant will be supplier of mixed supply to the students and Network partner will be supplier of service to the applicant. The place of supply in both the cases (i.e. mixed supply to the students and supply of service to the applicant by the channel/network partner) would be determined as per Section (1) of Section 10 of the IGST Act, 2017 in respect of supply of goods and as per clause (b) of sub section (2) of Section 12 of the IGST Act, 2017 in respect of supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d authority in both the cases has ruled contrary to the Department view and the Department has also interpreted it differently in both the cases. The issue on which advance ruling was sought has therefore, suffered in constitutions interpretation and leads to further confusion in the mind of taxpayer / appellant. PERSONAL HEARING 6. Personal hearing in the matter was held on 11.10.2023, Sh. Sanjiv Agarwal CA and Sh. Saurabh Agarwal, CA authorized representatives of the appellant appeared and emphasized that the practice of the appellant is beneficial to Revenue. They reiterated that the AAR has not followed its own ruling in the case of M/s Symmetric Infrastructure Private Limited. They also supplied a write up of seven pages, sample copy of invoices and copies of two agreement made with their network partners. The write up contains grounds already submitted by them during the appeal. In the write up, they placed reliance on the two Rulings (wherein supply has been held to be 'composite supply') one passed by AAAR, Kerala in the case of Logic Management Training Institutes Pvt. Ltd (2022) 61 GSTL 470 and the other one passed by AAR, Maharasthra in the case of M/s Rahul Ramchandra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly" or "mixed supply". 7.3 Before examining the nature of supply as 'mixed supply' or 'composite supply', we find it pertinent to go through the relevant provisions of the CGST Act 2017 which define the terms Composite supply and Mixed supply. 7.4 We note that as per Section 2(74) of the CGST Act the term "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. (emphasis supplied) 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 as well and are not dependent on each other. It shall not be a mixed supply if these items are supplied separately. From the definition it emerges that a mixed supply is two or more independent products or services which are offered together as a bundle but can also be supplied exclusive of each other. In order to identify if the particular supply is a mixed supply, the first requisite is to ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elements of provision of any other service or services. An example of 'bundled service' would be air transport services provided by airlines wherein an element of transportation of passenger by air is combined with an element of provision of catering service on board. Each service involves different treatment as a manner of determination of value of two services for the purpose of charging service tax is different. The rule is - 'If various elements of a bundles service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character' 7.8 This authority also carefully examined the nature of services offered by the appellant, because each individual case needs to be analyzed in the backdrop of multiple factors before determining whether such combination of supplies is naturally bundled together in the ordinary course of business or not? Further, if providing other supplies are incidental to providing principal supply and such other supplies were provided with a purpose of better facilitation of principal supply. then such combination of service, is to be treated as naturally bundled serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial and inseparable part of providing coaching. 7.9.1 Secondly. it is a normal practice in the market that all coaching centres/institutes advertise a package for providing coaching services including a student kit which consists of printed material, uniform, bags and other goods. Thus, in the instant case, we find that uniform. bags etc. though can be sold separately. In the case before us, these items contain the logo of the service provider. Thus, on the basis of the business practice being followed in the coaching industry, we are of the view that these are not separable. The main service or principal supply of the appellant is provision of coaching services and not of selling uniforms, bags etc. Normally, no layman will approach any coaching center for buying uniform or bags. Thus, the second criteria to qualify as bundled service is also satisfied as uniforms, bags are integral part of the coaching services. 7.9.2 The student kit is integral to one overall supply i.e. supply of coaching services in the instant case. If one or more is removed, the supply would be affected as removal of the student kit would affect the studies of the students (no printed material or study mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal supply and will be liable to G5T at the rate applicable for the principal supply. Issue No. 7 : Whether there is any tax liability on the appellant for selling text books to its students? Decision : As held in respect of hostel fees, the sale of text books to the students qualifies to be categorized as a composite supply as defined in Section 2(30) of the CGST Act, 2017, As per Section 8(a) of the CGST/SGST Act, 2017, the entire supply is to be treated as. falling under "SAC - 9992999293 - Commercial training and coaching services" being the principal supply and will be liable to GST at the rate applicable for the principal supply. 8.2 The AUTHORITY FOR ADVANCE RULINGS, MAHARASHTRA in the case of Kabul Ramchandran (Inspire Academy) vide their order dated 23.05.2022 held Question 3:- Whether "Nashik Cambridge Pre-school" is entitled for Nil rate of tax as per Serial No. 66 of the Notification No. 12/2017-CT (Rate) dated 28/06/2017, on the supply of some goods to its Pre-school students, without any consideration? 5.7.1.1 From the submissions made by the applicant, it appears that the applicant will be supplying goods such as: books, stationery, drawing material, sport ..... 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