2019 (10) TMI 1135 - AAR - GST

Classification of services - composite supply or mixed supply - gamut of services collectively referred to as Relocation Management Service provided by the Applicant - HELD THAT - The agreement show that the applicant is only acting as an agent of the Company to which it is providing service and the service is based on the requirement of each of the employee of the Company. The employee of the Company chooses the services required for him and the applicant facilitates the provision of such services and each of the value of the services is fixed by the agreement and separate Service Charges are fixed. Hence there is no common price involved in the entire service and hence is not covered under a single package. Composite supply or not - HELD THAT - The terms of the contract between the applicant and the Company are verified and found that the actual supply of relocation services is between the third parties to the Company and the invoicing is also done to the Companies by the third parties. The actual liability of paying the consideration is also on the Company and hence the Company is the recipient of service. The supplier of service is the Third Party Service Provider and each of these services may be provided by different Service providers. Hence this cannot be a composite supply, less so in the hands of the applicant - The billing is done as per the Schedule and includes Direct Cost of such service plus Service Fees plus taxes applicable. Each service has a separate service fees and the services are separately classifiable and if such services are billed in a common invoice that does not amount to a naturally bundled supply and hence the same is not a composite supply. Mixed supply or not - HELD THAT - The transaction of the applicant is verified and in case where the third parties supplies individual services to the company where invoicing is done to the company directly, the same does not come under services supplied by the applicant in relation to such supply. But where the services are actually supplied by the applicant as authorised services by himself to the company, and in case where such multiple services are for a single price, then since such supplies would not constitute a composite supply, the same may be categorized as a mixed supply . The services supplied by the applicant do not constitute a Composite Supply and would be a mixed supply, when the services are billed for a single price in case where the relocation related services are actually provided by them - The services provided to the company as an agent are management support services of relocation related services which is a single service covered under SAC 9985 and is covered under entry 23(ii) of Notification No.11/2017-Central Tax (Rate) dated. 28.06.2017.

Summary

Issues Involved:
1. Whether the services provided by the Applicant constitute a composite supply or a mixed supply under GST.
2. Classification of the services provided by the Applicant under GST.

Issue-Wise Detailed Analysis:

1. Composite Supply vs. Mixed Supply:

Applicant's Submissions:
The Applicant, engaged in providing Relocation Management Services, argues that their services should be classified as a composite supply under GST. They assert that their services are naturally bundled and supplied in conjunction with each other in the ordinary course of business, with relocation management being the principal supply. They reference various legal precedents and guidelines from the erstwhile Service Tax regime and international jurisprudence to support their claim. They emphasize that their services are provided as a package and are not available separately, thus qualifying as a composite supply.

Authority's Findings:
The Authority examined the agreement between the Applicant and their clients. It was found that:
- The Applicant acts as an agent for the client company, facilitating the provision of relocation services.
- The services are chosen by the employees of the client company based on individual needs and are facilitated by the Applicant.
- Each service has a separate value, and there is no single price for the entire package of services.
- The actual supply of relocation services is between third-party providers and the client company, with the Applicant merely coordinating these services.

Based on these findings, the Authority concluded that the services provided by the Applicant do not constitute a composite supply. Instead, they are management support services related to relocation, which are independent in nature and not naturally bundled.

2. Classification of Services:

Applicant's Submissions:
The Applicant contended that their services should be classified as a composite supply under GST, with relocation management being the principal supply.

Authority's Findings:
The Authority determined that the services provided by the Applicant are not a composite supply but can be classified as a mixed supply when billed for a single price. In cases where the Applicant provides multiple services for a single price, these services do not constitute a composite supply and should be treated as a mixed supply.

Additionally, the Authority noted that the Applicant acts as an intermediary, facilitating the supply of services and covered under the definition of "intermediary." The services provided by the Applicant as an agent are classified as "management support services of relocation related services" under SAC 9985 and are covered under entry 23(ii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

Ruling:
1. The services supplied by the Applicant do not constitute a Composite Supply and would be a mixed supply when billed for a single price in cases where the relocation-related services are actually provided by them.
2. The services provided to the company as an agent are "management support services of relocation related services," classified under SAC 9985 and covered under entry 23(ii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.