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Since the supply of maintenance service in the present case is for a single price with supply of spare parts/goods as and when required, 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/goods in the present case is naturally bundled, with the supply of goods being incidental to the supply of services and therefore such contract are to be considered as a composite supply of service where the principal supply is service and the supply of goods is incidental to such supply of service.

Shanti Prime Publication Pvt. Ltd.

Authority for Advance Ruling — Deciding Principal supply of the composite supply – The applicant is engaged in the business of manufacturing diesel and natural gas engines. The Applicant executes an AMC with end customers to provide maintenance services to their customers. These services are provided for a fixed charge based on the nature of maintenance activity that may be required. As per AMC agreement, the Applicant is responsible to upkeep the engines in good working condition by undertaking regular maintenance, for the same, the Applicant has engaged dealers which inter-alia provide maintenance services to the customers on behalf of the Applicant, who in the course of providing the maintenance services, can utilize consumables, parts etc., at his discretion and the value for such parts or consumables are recovered from the Applicant under AMC. The applicant sought an advance ruling regarding determination of GST liability by deciding principal supply of the composite supply qua maintenance contracts executed between the customer and the Applicant.
Held that:- The Hon’ble Authority for Advance Ruling observed that supply of services/goods is naturally bundled, with the supply of goods being incidental to the supply of services and, therefore, such contract are to be considered as a composite supply of service where the principal supply is service and the supply of goods is incidental to such supply of service. The Authority held that the principal supply in the present case between the applicant and the customer is one of supply of services.—Cummins India Limited., In Re ..... [2018] 07 TAXLOK.COM 094 (AAR-Maharashtra)