Page 151 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] IN RE : H.P. SALES INDIA PVT. LTD. 517
• Accordingly, the concept of composite supply, shall need to be ana-
lysed only where there is a bundled supply of two or more goods or
services.
49. Highlighting the abovementioned illustration as provided in the
law, a taxable person may be capable of supplying goods only whereas the pack-
ing and transportation services are arranged for by the recipient. However,
where such services are provided as a bundle along with the supply of goods,
the supply shall be a composite supply, principal supply being the supply of
goods. The fact that such goods or services may be capable of being supplied
independently cannot be considered as a factor for determining the nature of
bundled supply.
50. In the Appellant’s case, the items covered under the click program
are not capable of being sold independently as all the items like Ink, Blanket,
photo imaging plate etc. are essential for printing purpose and has no separate
use for customer.
Additional indicators for a composite supply
51. Drawing reference to the clarification issued by the Central Board of
Indirect Taxes and Customs (“CBIC”) on the concept of Composite supply via a
flyer, whether a supply qualifies as a composite supply would depend upon the
normal or frequent practices followed in the area of business to which services
relate. Such normal and frequent practices adopted in a business can be ascer-
tained from several indicators some of which are listed below :
(a) The perception of the customer
As explained above, the perception of the customer is to receive
(consume) all such goods together in order to obtain the desired
output. The same can further be understood by the fact that the cus-
tomer agrees to pay the consideration on click basis, i.e. the point in
time when the supply of all the consumable actually occurs. Where
these consumables were not naturally bundled, the consumer
would have selected different payment terms for each of the prod-
uct at the respective point of their consumption. These goods are
provided as a package to all the customers of the Indigo press ma-
chine under the Tier program, evidencing the fact that such con-
sumables are used together (to affect a print) and therefore the
payment is also made for the clicks made and not the consumables
held in the device.
(b) Majority of service providers in a particular area of business pro-
vide similar bundle of services.
Further to the submission made earlier, the HP indigo consumables
are provided as a bundled and charged on click basis globally. Also,
other industrial printers’ competitors also supply consumables as a
bundle and charge on click basis.
(c) The nature of the various services in a bundle of services will also
help in determining whether the services are bundled in the ordinary
course of business. If the nature of services is such that one of the
services is the main service and the other services combined with
such service are in the nature of incidental or ancillary services
which help in better enjoyment of a main service.

GST LAW TIMES  23rd July 2020  151