9911796707
TMI Blog2020 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Agilent') is owner of a premises located at CP-11, Sector-8 Technology Park, IMT Manesar, Gurgaon, Haryana-122051. The applicant has entered into a Lease Agreement with Agilent on 15-7-2014 for renting out a part of the said premises. Copy of the Lease Agreement is enclosed as Annexure-3. Annexure-2 to the Agreement describes the portion of premises leased out to the applicant. Apart from identified areas in the building, the applicant is also entitled to use the specified common areas, which are to be managed by Agilent only. 1.4 Clause 13 of the Agreement entitles the applicant to share the leased premises with its group companies, associates and affiliates, subject to obtaining prior written permission from Agilent and with prior written permission from the HSIIDC and other relevant authorities. 1.5 Further, the applicant has entered into 'Utilities & Services Agreement' with Agilent on 25-8-2014, whereby Agilent has agreed to provide various utilities and services to the applicant as described in Schedule-I thereto, such as utilities at common area, facility management, technical services, landscaping, window cleaning, parking lot maintenance, pest control, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te), dated 28-6-2017 relating to exempted intra-State supply of goods, wherein Electrical Energy is mentioned at Serial No. 104. On this basis, the applicant has contended that intra-States supply of electricity is exempted from Goods and Services Tax. 2.3 The applicant has also referred to Section 8 of the CGST Act which reads. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely :- (a) A composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. (b) A mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. It has contended that the supplies provided under the agreement are separately identifiable and the invoices are raised accordingly and as such it does not qualify as a mixed supply as contained in Section 2(74) of the CGST Act. Section 2(74) reads : "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 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of principal supply amongst such different supplies is an indispensable condition for attracting the definition of composite supply. 2.11 Both the supplies in the instant case are neither naturally bundled together nor is there any principal supply and therefore, the supplies do not qualify for being a composite supply as defined in Section 2(30) of the CGST Act. 3. Classification of supply of electricity : 3.1 As per the applicant, the supply of electricity/ electrical energy is treated as supply of goods and intra-States supply thereof is exempt from payment of CGST in terms of Serial Number 104 of Notification No. 2/2017-C.T. (Rate), dated 28-6-2017. On this basis, it is of the opinion that the supply of electricity is exempt from payment of tax. 4. Eligibility for input tax credit : 4.1 In terms of Section 16(1) of the CGST Act, the applicant is entitled to take credit of input tax charged on any supply of goods or services to him, which are used or intended to be used in the course or furtherance of his business. 4.2 The applicant is exporter of services which is qualified as zero-rated supply under Section 16(1) of the IGST Act, and is entitled to credit of input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Besides, the Agilent has also agreed to supply electricity to the applicant. The electricity supply is by way of grid supply and captive DG sets. However, metering of electricity supply via these two modes is done separately. The applicant has produced two types of sample tax invoices raised by the Agilent Technologies wherein Goods and Services Tax has been charged at 18% in both the invoices. The HSN / SAC Code mentioned in one of the Tax Invoice is 9972 12 for supply of renting services and 9972 21 for supply of electricity in other. However, the description of services mentioned in both of these sample invoices is Sundry Services. 6.2 Now, let us come to the legal provisions as contained under the Central Goods and Services Tax Act, 2017. It is also worth mentioning here that the provisions contained under the Central Goods and Services Tax and State Goods and Services Tax are identical and unless a special reference is made, the term GST signifies CGST/SGST Act. 6.3 Sale or consumption of electricity is a State subject mentioned at Serial No. 53 of List II of Seventh Schedule to the Constitution of India under Article 246 of the Indian Constitution. This position has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied in conjunction with each other in the ordinary course of business,, one of which is a principal supply". 6.11 A thread-bare reading of this section highlights following important aspects :- (a) Supply is made by a taxable person. (b) The supply consists of two or more taxable supplies of goods and services or both or any combination thereof. (c) The constituent supplies are naturally bundled together and supplied in [conjunction] with each other. (d) One of the constituent supplies is a principal supply. In the instant case, the supply is made by a taxable person and the number of supplies are also multiple. But as discussed earlier, the supply of electricity to the extent of it being supplied through grid is exempt from GST and, therefore, the condition of two or more taxable supplies is not satisfied. Further, the supply of utilities and supply of electricity are neither naturally bundled together nor are they supplied in conjunction with each other. Also, neither of the two supplies i.e. utility services and electricity supply can be termed as a principal supply and the other one being a natural ancillary. 6.12 In this manner, the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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