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TMI Blog2019 (3) TMI 1865X X X X Extracts X X X X X X X X Extracts X X X X ..... vice in as much as without replacing such parts/components the Warranty Repair Service could not be executed. Therefore, the supplies of Labour Services and Parts/components together under Warranty Repair Service are naturally bundled and have been supplied in conjunction with each other in the ordinary course of business. Since the supply of repair services in the present case, the supply of both, goods and services are made in conjunction with each other in the ordinary course of business and therefore, considering the provisions of the GST laws we find that supply of services/ parts is naturally bundled, with the supply of parts being incidental to the supply of services and therefore, such contract are to be considered as a composite supply of services where the principal supply is services and the supply of goods (Parts) is incidental to such supply of services. The provisions of agreement between HMIL and PSCL read with definition of composite supply as defined under Section 2(30) of CGST Act, 2017/SGST Act, 2017, it is to clarify that following ruling is applicable if repair service provided by the applicant shall be covered under composite supply if - (a) Primarily Repair s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2019. Shri K. Sivarajan, CA (partner, PWC, Tamil Nadu) and Miss Arushi Govil, C.A. (Authorized representative) appeared in PH on 08.03.2019. During the oral submission they stated that they have submitted detailed written submission along with application itself. They would like to reiterate the same. Further, they would like to submit few copies of invoices in support of their claim, which is taken on record. Along with above mentioned documents they also submitted paper book No-1, containing page-1 to 170, which is also taken record Mr. K. Sivarajan requested that he would like to submit a synopsis of their detailed submission, which they were allowed. DISCUSSION AND FINDING 7) We have gone through the submissions made by the applicant and examined the detailed explanation submitted by them. We observe that the questions sought by the applicant are:- i) Whether repair services carried out by the Applicant under the Dealership Agreement with HMIL, to fulfill the warranty obligation of HMIL which also involves supply of parts should be classified as a composite supply of services under Section 2(30) of CGST Act / Section 2(30) of SGST Act, 2017? ii) Whether the entire repa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant's view point and submission on issues on which the advance ruling is sought:- i) The activities provided by the applicant constitute supply of services. ii) Warranty repair services is a composite supply of goods and services, the services provided being the predominant supply. iii) The intention of the parties to the contract is for supply of services iv) The activity under taken by the applicant is historically constructed as provision of the services. v) Analysis of composite supply:- i) Two or more taxable supplies of goods or services or both shall be supplied by the Supplier to the Recipient, ii) Supply of goods or services or both should be naturally bundled in the ordinary course of business iii) Goods or services or both should be supplied in conjunction with each other in the ordinary course of business, iv) One of the two supplies should be "Principal supply", v) Similar composite contracts are classified as 'supply of services'. 12) We have considered the submissions made by the applicant in their application for advance ruling, in addition to the submission at the time of personal hearing and as well as views of the Jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply." Illustration- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply. b) Section 2 (90) of CGST/SGST Act, 2017 provides that - " 'Principal Supply' means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply fon-ning part of that composite supply is ancillary." iii) From the submissions made by applicant, it appears that they are mainly providing 'Repair & Maintenance Services' to their customers under "Warranty Repair Service" by servicing of their vehicles under Warranty period, In the event of defective parts/components, they replace such parts/components which appear to be just incidental or ancillary to the main activity of 'Repairing Services'. The supply of such part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 11/2017-Central Tax (Rate) dated 28.06.2017 / parallel Notification issued under SGST Act as amended. In view of the above discussion, provisions of agreement between HMIL and PSCL read with definition of 'composite supply' as defined under Section 2(30) of CGST Act, 2017/SGST Act, 2017, it is to clarify that following ruling is applicable if repair service provided by the applicant shall be covered under 'composite supply' if - (a) Primarily 'Repair service' is provided under warranty period, (b) Parts are replaced as incidental to repair service under warranty period in ordinary course of business, and (c) PCSL is being reimbursed by HMIL for labour charge and parts under warranty period. Any transaction/service which are not as per above condition shall not be covered by the following ruling; RULING i) 'Repair services' carried out by the Applicant under the Dealership Agreement with HMIL, to fulfill the warranty obligation of HMIL which also involves 'supply of parts' can be classified as a `composite supply of services' under Section 2(30) of CGST/SGST Act, 2017. ii) The entire 'repair services' including 's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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