The service of street lighting is classifiable under Heading 999112 attracting 18% tax rate
Classification of supply- The primary issue to be decided is whether the activity undertaken by the Appellant for the Thane Municipal Corporation amounts to a supply of goods or a supply or service or is it a composite supply involving both goods and service?
the Appellant prayed that the ruling of the lower Authority may be set aside and that supply in their case be held as a supply of pure services which is exempt by virtue of entry 3 of exemption Notification No 12/2017 CT(R).
We set aside the advance ruling No KAR ADRG 07/2020 dated 10-03-2020. We answer the questions raised in the original application as follows:
i. The street lighting activity under the Energy Performance Contract dated 05-12-2016 is considered as a composite supply of goods and services with the supply of service being the predominant supply. The service is classified under Heading 999112.
ii. The rate of tax applicable on the above supply is 9% CGST and 9% SGST as per entry Sl.No 29 of Notification No 11/2017 CT (R) dated 28-06-2017. The Appellant is not eligible for the benefit of exemption under entry 3 or 3A of exemption Notification No.12/2017-CT (R) dated 28-06-2017.
iii. The time of supply of services is the earliest of the following dates:
a) Date of issue of the invoice to TMC along with the Energy savings report; or
b) Date on which the payment is entered in the books of account of the supplier;
c) Date on which the payment is credited to his bank account.
iv. The time of supply of goods is not relevant as the transaction is held to be a supply of service.