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2018 (8) TMI 1071 - AAAR - GSTClassification of the supply - supply of UPS along with the battery - Mixed supply or not - naturally bundled goods - Challenge to advance ruling - Held that - There is no denying of the fact that an in-built battery of static converter (UPS) is part and parcel of the uninterrupted power supply system and is covered under Tariff Head 8504 and intra-State supply thereof attracts tax under CST Act as per rate applicable to goods enumerated under Schedule III of Tax-Rate Notification(s), vide serial No. 375, but the situation changes when storage battery or electric accumulator is supplied separately irrespective of whether under a single contract or a separate contract. The storage battery has multiple uses and can be put to different uses and when supplied separately with static converter (UPS) it cannot be considered as a composite supply or a naturally bundled supply - there is no infirmity in the Ruling rendered by the West Bengal Authority for Advance Ruling. Appeal dismissed.
Issues:
Classification of supply of UPS along with the battery as a mixed supply or composite supply under the GST Act. Detailed Analysis: The appeal was filed by a company manufacturing power solution products against the ruling of the West Bengal Authority for Advance Ruling, which classified the supply of UPS and Battery as a Mixed Supply under the GST Act. The core issue was whether the supply of UPS with an external storage battery constitutes a composite supply or a mixed supply. The definitions of composite supply, principal supply, and mixed supply under the GST Act were crucial in determining the classification. The appellant argued that UPS with an external battery falls under Tariff Head 8504 and should be taxed at 18% under item No. 375 of Schedule III of the GST Act. They contended that the battery is an integral part of UPS and is naturally bundled with it, making the supply a composite supply. The appellant cited various case laws to support their argument, emphasizing the essential nature of the battery for the UPS to function as an uninterrupted power supply system. The appellate authority examined the arguments and provisions of the GST Act. They agreed with the West Bengal Authority for Advance Ruling's observation that the UPS and battery are naturally bundled when supplied together, forming a composite supply under Tariff Head 8504. The authority highlighted that the battery's strength, make, or number can vary based on customer requirements, indicating that the battery has multiple uses and is not unique to UPS. Therefore, when supplied separately, the battery cannot be considered a composite supply. In conclusion, the appellate authority found no issue with the ruling of the West Bengal Authority for Advance Ruling and dismissed the appeal. The decision was based on the understanding that the UPS and external storage battery, when supplied together, constitute a composite supply under the GST Act. The appellant was informed of the decision through a copy of the order. This detailed analysis of the judgment highlights the legal arguments, case laws cited, relevant definitions under the GST Act, and the final decision reached by the appellate authority regarding the classification of the supply of UPS along with the battery.
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