The supplies made under Cost Centres form a composite supply
Classification of service- The applicant is a Public Sector Undertaking, engaged in manufacture of wide range of products to meet the needs of mining, construction, power, irrigation, fertilizer, cement, steel and rail sectors. The applicant has sought advance ruling in respect of the following question:-
“Whether the supplies made by Cost Centres C,D, E and G are independent supplies of goods and services (as applicable) or composite supply with principal supply of goods?”
he contention of the applicant is that since the scope of activities to be undertaken has been clearly demarcated in the contract entered with BMRCL, each cost centre of the applicant is making separate supplies based on their scope. The applicant further states that the scope of each of the cost centres are independent of each other and the obligations and responsibilities of each of the Cost Centres should be based on their independent scope of works. With this, the issue whether the individual cost centres are independent of each other is to be verified.
The contract is verified and found that the contract is a single contract for both supply of goods and also for services related to those goods supplied, like installation, integration, commissioning, training and maintenance and splitting of the entire contract is for the purposes of milestones in the completion of the contract and is a single continuous chain.
Held that- The supplies made by the applicant under Cost Centres C, D, E and G form a composite supply and since the supply of intermediate cars is the principal supply, would be treated as the supply of intermediate cars as per section 8 of the CGST Act, 2017 and section 12 of the CGST Act, 2017 is applicable to the issues related to the time of supply.