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The applicant has been allotted the principal job work of Custom Milling of Paddy for manufacturing of rice, along with custom milling they will also get the payment towards the transportation of paddy & Rice, usage of gunny begs for packing of Rice and incentives as an additional charge for custom milling. There being a single contract for all above supplies of goods & services and as the said contract comprises of two or more supplies (i.e. transportation, supply of packing material & incentives) and one of which is principal supply i.e. custom milling of paddy, it shall treated as composite supply

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Liability of GST — Authority for Advance Ruling —Taxability on Job Work -- The applicant has filed the application requesting advance ruling regarding tax liability in the business of job work activity of custom milling of paddy involving milling activity, transportation of rice and usage charges of gunny bags. In the execution of job work of custom milling, applicant has to collect / procure paddy from Primary Co-operative Societies/paddy storage centers and thereafter transport it to the applicant’s milling site. After milling of Rice, applicant has to deliver rice @67% of total quantity of paddy and the applicant retains other bye/waste products. Besides, this milling job work of paddy, the applicant receives milling charges and incentive as decided by the State Government of Chhattisgarh.
Held that:- The Hon’ble Authority for Advance Ruling held that the applicant has been allotted the principal job work of Custom Milling of Paddy for manufacturing of rice, along with custom milling, they also get the payment towards the transportation of paddy & Rice, usage of gunny begs for packing of Rice and incentives as an additional charge for custom milling. There being a single contract for all above supplies of goods & services and as the said contract comprises of two or more supplies, it shall treated as composite supply. Accordingly the tax liability on a composite supply shall be decided as a supply of such principal supply under Notification no. 31/2017-CT(R) notification no. 11/2017-CT (Rate) dated 28-06-2017 serial No. 26. (c).
Taranjeet Singh Tuteja & Brothers [2018] 5 TAXLOK.COM 096 (AAR-CHHATTISGARH)