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TMI Blog2022 (3) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... Other allied services for import & export of cargo and for coastal movements. The appellant plans to own a fleet of commercial vehicles like trailers and also hires necessary vehicles from market as well. The appellant has submitted that they are in process of entering into an agreement with a specific client engaged in the business of Export of Rice. The appellant has planned to provide following services at a single consolidated rate (per container) for the entire bundle of services: (1) Clearing and Forwarding Agency with the help of sister concern, as the CHA License is in the name of a sister concern M/s. SRS Cargo. (2) Transportation of cargo containing agricultural produces, Rice, Tea etc. (3) Providing labours for loading of cargo into containers. (4) Transportation of empty container from CFS / empty container yard to client's warehouses at various locations (5) Other allied services like: - Lift on/Lift off charges to CFS/empty container yard - Survey Tally formality for goods loaded in container - Obtaining Customs permission for self-sealing (6) Obtaining Customs related certificates/clearing such as Bill of Lading, Health Certificate, Non GMO, Phytosa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant documents with regard to the services to be supplied/provided by the applicant, no decision can be taken in the matter for the reasons discussed hereinabove." 5. M/s. Shree Arbuda Transport has filed an appeal with us against the aforesaid Ruling under the provisions of Section 100 of the CGST and GGST Acts, 2017. In the Grounds of Appeal, the appellant has inter alia submitted that an Advance Ruling can be sought when a taxpayer wants to know the implication of prevailing tax law in the business proposition; that non-submission of an agreement cannot be a ground for declaring questions as hypothetical. Now, in this appeal proceedings, the appellant has submitted a Draft Agreement (unsigned), and stated that it would be implemented once the provision of law are clear. 6. The appellant has made following submissions: Question-1: Mixed Supply or Composite Supply Section 2(30) of the CGST Act, 2017 defines 'composite supply' as under: "(30) "composite supply" means a supply 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Services nowhere else classified'. Question-3: Availment of ITC by appellant In view of the fact that the bundle services consists of few supplies which are exempt under GST, the appellant intends on providing the entire bundle service at a fixed consolidated rate. The appellant further intends on charging GST at the rate of 18% on entire bundle. The appellant has submitted that they fulfill all the conditions of Section 16(2) of the CGST Act, 2017 and they are eligible to claim Input Tax Credit with regards to the Inward Supplies procured for making the subject outward supply. However, as per the provision of Sec 17(2) of CGST Act, 2017, the Input Tax Credit attributable to exempt supplies must be reversed by the taxpayer. The appellant further submitted that as the tax on entire bundles service is being discharged at 18%, the supplies which would have enjoyed exemption is also being taxed at 18%. Therefore, the appellant is not rendering any exempt supplies and therefore, they wish to claim the entire ITC Question-4: Eligibility of exporter client to claim refund of GST paid by appellant The appellant submitted that as the tax is discharged on the entire bundle, the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed under Section 100(2) of the CGST Act, 2017. 9. Even otherwise, the last date for filing appeal stands extended w.e.f. 15.03.2020 in view of the Orders dated 23.03.2020 and 27.04.2021 of Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No. 3/2020 read with CBIC Circular No. 157/13/2021GST dated 20.07.2021. FINDINGS: 10. We do not agree with the views of Gujarat Authority for Advance Ruling to the effect that Ruling cannot be provided in absence of signed Agreement. The very purpose for creating the Authority for Advance Ruling is to help the applicant in planning his activities and bringing in certainty in determining tax liabilities. So, there is nothing wrong if any the applicant seeks Advance Ruling by describing his activities in detail before signing an Agreement. It is open for the Advance Ruling Authority to seek more details, clarification or supporting documents from the applicant. In this case, the appellant has described the nature of services to be provided by them and in this appeal proceedings submitted a Draft Agreement (unsigned). So, we proceed to decide this appeal on merit on the basis of submissions and Draft Agreement submitted by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Sealing. 3. Weighment :- Weighment of empty / loaded containers at warehouse and loaded at port gates. 4. CFS Services :- Lift on charges to CFS / Empty Container Yard. 5. Labour Services :- Providing labour through independent Service Providers for loading of cargo into containers. 6. Movement Making Services :- Filing of shipping instructions, filing of VGM, clearing of EGMs and other movement making services. 7. Survey of Goods Loaded :- Survey Tally formality for goods loaded in the container. OTHER SERVICES 1. Transportation of cargo of Principal's commodities / containers from factory/warehouse to CFS / port; and Transportation of empty container from CFS / Empty container yard to party warehouses in various locations. 2. Examination of empty export worthy containers / cleaning/ paper and plastic sheet placement. 3. Monitoring cut off time to tender containers for both the parties. 4. Placement of booking with shipping lines for export containers / import containers. 5. Courier of all relevant documents to the Principal. A. Responsibilities of the Service Provider i. Coordinate with vessel agent, track vessel position, and update Principal on estim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Container Diesel Base Rate (Rs.) Base Rate per Container (Rs.) 01 Kandla-Gandhidham- Kandla 20' 61.82 7,675/- (plus 18% GST*) 02 Mundra-Gandhidham- Mundra 20' 54 11,150/- (plus 18% GST*) > 61.82 11,432/- (plus 18% GST*) 02(A) Mundra-Gandhidham- Kandla 20' Sr.No.2 + addition of Rs. 688 per container (plus 18% GST*) *GST Rates shall be applicable as notified by the Government from time to time - Above base rate per containers is the minimum guaranteed consideration per container, as per the diesel rate mentioned in above table. - For every Re.1 increase or decrease in the rate of diesel per litre, the consideration payable per container shall increase / decrease as under, subject to, consideration payable will never be less than base rate per container given in above table: Sr. Port of Loading Increase/decrease in rate per container 01 Kandla-Gandhidham-Kandla Rs. 50/- 02 Mundra-Gandhidham-Mundra & Mundra-Gandhidham-Kandla Rs. 100/- - For related Certificates and forwarding services (shipping line services), Service Provider will obtain the same and charge its amount as per understanding of both the parties. - For any other service from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and labour supply service 998519 Other employment and labour supply services nowhere else classified Heading 9997 Other services Group 99979 Other miscellaneous services 999799 Other services nowhere else classified 17. After going through the nature of services to be provided by the appellant, we find that the applicable rates of GST on such constituent services, if provided separately, are as follows: TABLE Heading or Service Code (Tariff) Nature of service to be provided by the appellant Rate (per cent.) Conditions Notification No. with Sr.No. CGST SGST IGST Heading 9965 or Heading 9967 (i) Services provided by a Goods Transport Agency (GTA) by way of transport in a goods carriage of - (a) agricultural produce; ... ... ... ... ... (d) milk, salt and food grain including flour, pulses and rice; ... ... ... ... ... Nil Nil Nil Nil Sr.No.21 of Notification No. 12/2017-Central Tax (R) dated 28.06.2017. Sr.No.21 of Notification No. 12/2017-State Tax (R) dated 30.06.2017. Sr.No.22 of Notification No. 9/2017-Integrated Tax (R) dated 28.06.2017. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the term 'composite supply', as given in Section 2 of the CGST Act is as under: "(30) "composite supply" means a supply 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;" To treat any supply as 'composite supply' one of the essential requirements is that two or more taxable supplies of services should be naturally bundled in the ordinary course of business and one of which should be a 'principal supply'. We observe that the services to be supplied by the assessee are generally NOT bundled in the ordinary course of business. In the ordinary course of business, services of Goods Transport Agency, Clearing & Forwarding, Labour supply etc. are treated as different services and generally provided at separate rates. So, we are of the view that the bundl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal supply, shall be treated as a supply of such principal supply; and (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." 22. In view of the above statutory provision, it is very clear that such mixed supply would be treated as supply of that particular supply which attracts the highest rate of tax and thus, would attract the highest rate on the value i.e. single price of the entire bundle of mixed supply. In the present case, the highest rate attracted is 18% IGST or 9% CGST & 9% SGST for all services other than the service of transportation of Rice by a Goods Transport Agency, which attracts Nil rate of GST. Therefore, we are of the view that the entire bundle of services provided as a mixed supply would attract 18% rate. The appellant is also of the view that the entire bundle of services would be taxed at 18%. 23. As regards classification / HSN of the mixed supply, the appellant has contended that as the bundled service in question is a combination of services, it will be classified under HSN 999799 bearing description, "Other Services nowhere else classified" which attracts th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR or appeal before us. We are of the view that the appellant is not entitled to raise this question as to whether their exporter client shall be eligible to claim refund of GST paid by them or not. 26. In view of the foregoing discussion, we allow the appeal filed by M/s. Shree Arbuda Transport, Gandhidham, by modifying the Advance Ruling No. GUJ/GAAR/R/82/2020 dated 17.09.2020 passed by the Gujarat Authority for Advance Ruling as under: Question 1: If we want to provide all above services for a "Single consolidated Rate" as a package, whether such supply would be treated as "Mixed supply" as per the provisions of Section 2(74) of the CGST Act, 2017, since the services are not naturally bundled and are capable of being provided independently? Or it shall be treated as "Composite supply"? Answer: Such supply would be treated as 'mixed supply' as per the provisions of Section 2(74) of the CGST Act, 2017. Question 2: What shall be the applicable HSN code and corresponding GST Rate for such bundle of services? (Highest Rate of Service in the bundle is 18%). Answer: The applicable HSN / Service Code (Tariff) would be 996719 and corresponding GST Rate for such 'mixed supply' wo ..... 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