Page 147 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] IN RE : H.P. SALES INDIA PVT. LTD. 513
30. Accordingly, one of the factors which was considered by Maharash-
tra AAR to conclude that the services were not composite supply was the fact
that the individual products were available separately. This is not applicable to
the Appellant’s case as the different elements of the click model are not available
separately.
There is an obvious contradiction in the approach of the Impugned
Order.
Compulsory supply
31. There is no concept of ‘compulsory supply’ or ‘compulsorily bun-
dled’ in the GST law. Supplies may be naturally bundled or artificially bundled.
Without prejudice to our earlier submissions, the department circulars also illus-
trate cases of composite supply where services are treated as naturally bundled,
though these may be compulsory in some case. To illustrate :
• Boarding school and education service;
• Room rent in hospital
• Food supplied to inpatient
• Printing contracts
• Re-treading of tyres
• Airline ticket with food (this is mostly bundled in corporate fares)
• Hotel packages
32. Further, the concept of natural bundling is not static and evolves as
the businesses come up with new models of packaging their products and ser-
vices. Hotel rooms with breakfast complimentary was a concept which was not
always prevalent. Airline tickets combined with food is also one such case. So,
the concept of natural bundling has to be looked at as per industry practice, cus-
tomer preferences, technological and other changes etc.
We wish to illustrate the same through an example as highlighted in the
Flyer issued by the Central Board of Indirect Taxes & Customs (’CBIC”), on
“Goods and Services Tax Composite Supply and Mixed Supply”.
Illustration
A hotel provides a 1-D/3-N package with the facility of breakfast. This is
a natural bundling of services in the ordinary course of business. The service of
hotel accommodation gives the bundle the essential character and would, there-
fore, be treated as service of providing hotel accommodation.
Now, in general trade practice most hotels provide additional services to
its guests in addition to such accommodation bundled with breakfast services,
For instance, a hotel provides for accommodation services and breakfast as a
bundled supply, however in addition to the same, it also offers to the customers
to select/receive additional services for an additional fee like laundry services,
airport pick up and drop. etc. Offering such additional services at an additional
fee shall not change the nature of supply of accommodation services bundled
with breakfast services. The Appellant humbly submit that similarly, the option
provided to end customers to avail optional additional supplies under the a la
carte model shall not change the nature of supply of the bundle of Electro Ink and
consumables supplied under the click model.
Similarly, in some of the Advance Rulings or Appellate Advance Rul-
GST LAW TIMES  23rd July 2020  147