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2023 (12) TMI 1270 - AAR - GSTClassification of goods - rate of tax - HSN Code - sale of solar driven submersible pump (water pump) - supply involves different components - whether the same shall constitute as single supply or together as composite supply or treated as mixed supplies? - HELD THAT - The applicant has failed to provide technical specification of the supply. It is found that each component is capable of functioning independent of each other. Hence, we find that the supply cannot be treated as single supply. Further, it is observed, there are clear provisions in the GST Act itself as regards composite supply as defined under Section 2(30) and mixed supply under Section 2 (74) of CGST Act, 2017 which deal with situations where supply consisting of two or more taxable goods or services or both is involved. In present case, it is not found either water pump is supplied with solar panel and controller in ordinary course of business and vice versa. Nor is found any principle supply. Each component can supplied separately. Hence, the supply in question cannot be termed as composite supply - So far as the concept of mixed supply is concerned, the same is defined under Section 2(74) of the CGST Act to mean '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'. The supply of each one of the items in question as proposed by the appellant is independent and each one of the items can be supplied separately in the appellant's own case - It is observed that from the definitions it emerges that a supply, consisting of any possible combination of more than one type of goods which are independent of each other in terms of their supply but which are sold together as a bundle simply because the buyer has ordered purchase of such combination of goods, does not constitute a composite supply as the absence of the element of principal supply and natural bundling in the ordinary course of business weighs against the definition of composite supply - the supply of different items namely Solar Panel, Controller and Solar Pump, without anyone of the goods being supplied as principal supply would be covered by the definition of mixed supply of different type of goods. The Solar driven submersible water pump comprising of Solar panel, Controller and submersible pump is a mixed supply and the highest rate of GST will be applicable amongst goods supplied by the applicant.
Issues Involved:
1. Applicable tax rate on the sale of solar-driven submersible pumps. 2. HSN code for solar-driven submersible pumps. Summary: Issue 1: Applicable Tax Rate on Sale of Solar-Driven Submersible Pump The applicant, M/s Aastha Traders, sought an advance ruling on the GST rate applicable to solar-driven submersible pumps. The Authority for Advance Ruling (AAR) examined the components of the solar-driven submersible pump, which include solar panels, a controller, and a water pump. It was determined that each component has its own classification and corresponding GST rate: - Solar Panels: Classified under Tariff heading 8541 43 00, chargeable to GST at 12% (6% CGST + 6% SGST). - Controller: Classified under Chapter Heading 8504, chargeable to GST at 18% (9% CGST + 9% SGST). - Water Pump: Classified under Tariff heading 8413, chargeable to GST at 18% (9% CGST + 9% SGST). The AAR concluded that the supply of these components together does not constitute a "composite supply" but rather a "mixed supply" as defined under Section 2(74) of the CGST Act. Consequently, as per Section 8(b) of the GST Act, the highest rate of tax among the supplied goods applies. Therefore, the applicable tax rate on the sale of solar-driven submersible pumps is 18% (CGST@9% and SGST@9%). Issue 2: HSN Code for Solar-Driven Submersible Pump The applicant also sought an advance ruling on the HSN code for solar-driven submersible pumps. The AAR determined that since the supply involves different components (solar panels, controller, and water pump) that can function independently, it does not qualify as a "composite supply." Instead, it is treated as a "mixed supply." As a result, the highest rate of GST among the supplied goods applies. The specific HSN code for each component would be: - Solar Panels: HSN 8541 43 00. - Controller: HSN 8504. - Water Pump: HSN 8413. Therefore, the HSN code for the solar-driven submersible pump will be treated as a mixed supply, and the highest rate of GST will be applicable among the goods supplied by the applicant. Ruling: 1. Applicable Tax Rate: 18% (CGST@9% and SGST@9%). 2. HSN Code: Treated as mixed supply, with the highest rate of GST applicable among the goods supplied. This ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh and subject to provisions under Section 103(2) of the CGST Act, 2017, until declared void under Section 104(1) of the Act.
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