Sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises do not form a composite supply.
Authority for Advance Ruling — Supply of LPG – The applicant are suppliers of LPG to domestic and industrial users. They entered into LPG supply agreement with industrial users for longer period ranging from 5 to 10 years. They setup a structure called manifold at the premises of the recipient for supply of LPG. This manifold consists of LPG cylinders, regulators, primary piping, pressure regulator systems etc., the ownership of the structure lies with the applicant. The applicant sought Advance Ruling as to whether the impugned supply can be regarded as ‘composite supply’ and whether the rate of tax of the principal supply could be adopted for the whole of supplies; whether sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises to store the LPG which is a condition precedent for supply of LPG be treated as composite supply under Section 2(30) of GST Act, 2017; whether supply/sale of LPG be treated as principal supply for above mentioned transaction. The authority observed that ‘Take or Pay’ Charges cannot form a part of composite supply along with other components of composite supply.
Held that:- The Hon’ble Authority for Advance Ruling held that the sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises do not form a composite supply.
Sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises do not form a composite supply.
Authority for Advance Ruling — Supply of LPG – The applicant are suppliers of LPG to domestic and industrial users. They entered into LPG supply agreement with industrial users for longer period ranging from 5 to 10 years. They setup a structure called manifold at the premises of the recipient for supply of LPG. This manifold consists of LPG cylinders, regulators, primary piping, pressure regulator systems etc., the ownership of the structure lies with the applicant. The applicant sought Advance Ruling as to whether the impugned supply can be regarded as ‘composite supply’ and whether the rate of tax of the principal supply could be adopted for the whole of supplies; whether sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises to store the LPG which is a condition precedent for supply of LPG be treated as composite supply under Section 2(30) of GST Act, 2017; whether supply/sale of LPG be treated as principal supply for above mentioned transaction. The authority observed that ‘Take or Pay’ Charges cannot form a part of composite supply along with other components of composite supply.
Held that:- The Hon’ble Authority for Advance Ruling held that the sale of LPG, Collection of Take or Pay Charges for not lifting minimum assured quantity and rental charges for supplier gas system installed at the customer premises do not form a composite supply.