Page 154 - GSTL_23rd July 2020_Vol 38_Part 4

520 GST LAW TIMES [ Vol. 38
pect that a contractor who will supply the goods may also supply
the services along with it,”
• Giriraj Renewables Private Limited (Maharashtra Appellate AAR) -
“38. As per the Appellant, since the Scope of work includes the
provision of goods and services, the entire contract is one turnkey
EPC contract and hence would qualify as a ‘composite supply’
within the definition of the term as given under Section 2(30) of the
CGST Act. It is also their contention that the principal supply in
such case is the provision of goods and hence the entire contract
should be taxable @ 5%.
The term ‘composite supply’ is given under clause (30) of Section 2
of the CGST Act “composite supply” means a supply made by a
taxable person to a recipient consisting of two or more taxable sup-
plies of goods or services or both, or any combination thereof which
are naturally bundled and supplied in conjunction with each other
in the ordinary course of business, one of which is a principal sup-
ply.
Illustration : - Where goods are packed and transported with insur-
ance, the supply of goods, packing materials, transport and insur-
ance is a composite supply and supply of goods is a principal sup-
ply;
It is important to see the definition of ‘principal supply’ and goods
along with the same, “principal supply” means the supply of goods
or services which constitutes the predominant element of a compo-
site supply and to which any other supply forming part of that
composite supply is ancillary;
A reading of the definition of 'composite supply' shows that there
should be -
(a) Two or more taxable supplies;
(b) Of goods or services or both;
(c) Or in combination thereof;
(d) Which are naturally bundled and supplied in conjunc-
tion with each other;
(e) In the ordinary course of business;
(f) One of which is a principal supply.
39. The contract fulfils the condition of composite supply. There is
a supply of goods and services. They are naturally bundled in the
sense that the goods and services may be required to fulfil the in-
tention of the buyer in giving the contract. The supply of goods and
services are provided as a package and the different elements are
integral to flow of supply i.e. one or more is removed, the nature of
the supply would be affected. Thus, from a reading of the entire
contract as well as from the definition of composite supply what
can be easily gathered is that the buyer has given a contract for set-
ting up Solar Power Generating Supply to the appellant, and there-
fore it is single composite supply of goods and services and installa-
tion thereof
40. In order to understand the scope of a ‘composite supply’ and
also to know what may be the criteria to judge a supply as a ‘com-
posite supply’, the CBIC has published an e-flier on the subject. As
per the e-flier, ‘Composite supply’ entails the concept of ‘naturally
bundled supply’, and whether services are bundled in the ordinary
GST LAW TIMES  23rd July 2020  154