Page 70 - GSTL_26th March 2020_Vol 34_Part 4

580 GST LAW TIMES [ Vol. 34
and supplied in conjunction with each other in ordinary course of business -
Section 2(30) of Central Goods and Services Tax Act, 2017. - Many aspects of the
transactions envisaged under the agreement entered into between the petitioner and its
customer hospitals/laboratories militate against viewing them as a composite supply as
defined above. Firstly, the supplies are made by two different taxable persons; the supply
of instrument being by the petitioner and the supply of the reagents, calibrators and dis-
posables being by his distributor, who purchases it from him on principal to principal
basis. Although it could be argued that there is a relationship between the said persons
that influences the valuation of the supply, the same does not take away from the fact that
the supplies are, in reality, made by two different taxable persons. Secondly, the two sup-
plies do not answer to the description of being “naturally bundled and supplied in con-
junction with each other in the ordinary course of business”. While they were not bun-
dled together as a matter of fact, in the instant case, there is also no material to suggest
that they are so bundled and supplied in conjunction with each other in “the ordinary
course of business”. In fact, the business model followed by the petitioner appears to have
held the field for a considerable period of time and would show that in the ordinary course
of business, the supplies are not bundled. [paras 8, 9, 10]
Composite supply under GST - Two independent supplies cannot be
clubbed to notionally alter nature of each supplies as they existed at relevant
point in time - Concept of enhancement of utility relevant for valuation, can-
not be imported into concept of composite supply under Section 2(30) of Cen-
tral Goods and Services Tax Act, 2017. - The concept of enhancement of utility of the
instrument through the supply of reagents/calibrators/disposables, while relevant for the
purposes of valuation of the supply of instruments, cannot be imported into the concept of
composite supply under the GST Act. A distinction has to be drawn between the nature
of a supply and the valuation thereof. While clubbing of two independent supplies may be
resorted to for the purposes of valuation of each of those supplies, there is no scope of
clubbing of two independent supplies so as to notionally alter the very nature of each of
those supplies as they existed in fact, at the relevant point in time. For a supply to be seen
as a composite supply, it must answer to the definition of the term “composite supply” at
the time of its supply. [para 8]
Composite supply under GST - Same taxable person effecting contin-
uous supply of services coupled with periodic supplies of goods/services to be
used in conjunction therewith - Such supply could possibly be composite
supplies - Section 2(30) of Central Goods and Services Tax Act, 2017. [para 10]
Composite supply under GST - It must take into account supplies as
effected at given point in time on “as is where is” basis - Section 2(30) of Cen-
tral Goods and Services Tax Act, 2017. [para 10]
Petition disposed of
CASES CITED
Nell Gwynn House Maintenance Fund Trustees v. Commissioners
— (1999) Simon’s Tax Cases 79 (HL) — Relied on ...................................................................... [Para 9]
Telewest Communications PLC v. Commissioners
— (2005) Simon’s Tax Cases 481 (CA) — Relied on .................................................................... [Para 9]
REPRESENTED BY : S/Shri V. Sridharan, Sr. Advocate, Shaji Thomas and
Jen Jaison, Advocates, for the Petitioner.
Dr. Thushara James, Government Pleader and
Smt. Maheswary G., CGC, for the Respondent.
[Judgment]. - The petitioner herein is a company incorporated under the
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