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TMI Blog2023 (12) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... nent 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers were charging GST @ 18% (9% + 9%), whereas some dealers were charging GST @ 12% (6% + 6%) on solar device driven submersible pump. They were also using different HSN code. 4. In view of the above, they have sought Advance ruling for determination of the GST rate applicable to Solar water submersible pump and the HSN code required to be used while issuing invoices. 4. The applicant has submitted their interpretation of law as under- The Advance Ruling is being sought the GST applicable tax rate w.e.f 18/07/2022 on sale of solar device driven pump primarily designed to powered by solar modules that helps draw surface or ground water out for domestic as well as irrigation which consequently serves the agricultural Purpose. Further, what is the HSN Code to be used for solar device driven pump primarily designed to powered by solar modules that helps draw surface or ground water out for domestic as well as irrigation which consequently serves the agricultural Purpose. 5. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led technical specification of the product. They however failed to furnish any details regarding the technical specification of the product in question. 11.1 Solar water pumps are powered by solar energy and are used for irrigation, livestock watering, and other water transfer purposes. In order to arrive at the correct classification of the product in question, it is necessary to differentiate between the products, 'Solar power based devices' and 'Submersible pump that can also run using solar power'. If all the devices that can be run using electricity generated by solar power were to be termed as 'solar power based device', then all the gadgets like Air Conditioners, Refrigerators or any other electrical appliances used by individuals in then-homes using solar power would be termed as 'solar power based device'. This however is not the case. Thus, it is essential to determine whether a device can run independently of solar power. A solar driven water pump includes different components namely,- i) Solar Panels, ii) Controller, and iii) Water Pump. It is necessary to understand the purpose and classification of each individual component bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r power generator or as part of solar pumping system. Electrical transformers, static converters and inductors are classifiable under Tariff heading 8504 of the CGST Tariff. There is a specific entry at SI No 375 of Schedule -III of GST Tariff wherein GST has been prescribed @ 9%. SL. NO HSN DESRCIPTION RATE 375 8504 Electric transformers, static converters and inductors 9% Hence the Controllers, classifiable under heading 8504 are chargeable to GST @ 18% (9% CGST + 9% SGST). 11.4 A Water pump is a mechanical device that is used to transfer water from one location to another. There are different types of water pumps. Since the applicant has sought ruling with respect to submersible pump, we shall discuss the details pertaining to same. A submersible pump is a mechanical equipment that works by pushing the water towards the surface. It has a hermetically sealed motor connected to the pump body that helps to push the fluid towards the surface. Submersible pumps are designed to be placed underwater and are typically used to pump water from wells or other subterranean sources. The applicant failed to submit the detailed technical specifications pertaining to the water pump. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.' An illustration provided under the said definition provides that "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. In the above illustration, it is obvious that the supply of packing material, supply of service of insurance or transport is not independent of the supply of goods. Hence, the transportation of goods, supply of packing material and insurance are covered by the definition of "composite supply" with the supply of goods which is a principal supply in the illustration. Accordingly, from the above definition and illustration, we are of the view that a "composite supply" can be determined on the basis of the following criteria:- (i) Supply of two or more goods or services or combination of both; (ii) The supply should be made in a natural bundle, i.e. the goods and/or services are provided as a combination in the ordinary course of business; (iii) The individual items (good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of the element of principal supply and natural bundling in the ordinary course of business weighs against the definition of composite supply. We, therefore, hold that 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. We draw support from the ruling given by West Bengal Authority for Advance Ruling in the case of Sarj Educational Centre reported at 2019 (22) G.S.T.L. 315 (A.A.R-GST)], wherein it was held in the case of the applicant, who was engaged in supplying food and other services, that they are not naturally bundled with the lodging services as all these components are independent of each other. The said ruling has been upheld by the Appellate Authority for Advance Ruling of West Bengal as reported at 2019 (27) G.S.T.L. 131 (App, AAR - GST). Once the question of the nature of supply, whether composite or mixed, is decided, the question that remains, to be addressed is the rate of GST applicable to such supplies. We find that as per the provisions of Section 8 (b) of the GST Act, 2017, conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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