Page 155 - GSTL_23rd July 2020_Vol 38_Part 4

2020 ] IN RE : H.P. SALES INDIA PVT. LTD. 521
course of business would depend upon the normal or frequent
practice followed in the area of business, it also says that in order to
qualify for a composite supply one of the characteristics would be
that ‘none of the individual constituents are able to provide the es-
sential character of the service’. What is the normal frequent prac-
tice in the trade can be ascertained from the following indicators :-
• The participation of the consumer or the service receiver. If
large number of service receivers of such bundle of services
reasonably expect such services to be provided as a package,
then such a package could be treated as naturally bundled in
the ordinary course of business.
• Majority of service provider in a particular area of business
provide similar bundle of services.
• 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 inci-
dental or ancillary services which help in better enjoyment of a
main service.
• The other instructive indicators can be the following :-
(a) There is a single price or the customers pays the same
amount;
(b) No matter how much of the package they actually re-
ceived;
(c) The elements are normally advertised as a package;
(d) The different elements are not available separately;
41. From the application of the above indicators, we hold that the
contractor providing the design, procurement, supply, develop-
ment, testing and commissioning of the Plant which includes the
supply of both goods and services is a composite supply as per the
definition in the Act. There are two taxable supplies - one of goods
and the other of services and they both are naturally bundled and it
is natural and also a practice to expect that the contractor who will
supply the goods, will also supply the services alongwith it. In the
business of contracts for the Solar Power Generating System, it is a
practice to provide a Plant as a whole along with the supply of ser-
vices. We differ with the order of the Advance Ruling Authority in
this respect.
• Giriraj Renewables (Karnataka Appellate AAR) [2018 (17) G.S.T.L.
156 (App. A.A.R. - GST)]
“22. In the instant case there is no dispute that the contract in
question involves a supply of both goods and services. However, in
order for the supply to be termed as a ‘composite supply’, what is
required is that the supply of the goods and the services should at
least be bundled, more specifically be ‘naturally bundled’, and sup-
plied in conjugation with each other. The term ‘naturally bundled’
has not been defined in the GST Act. We note that the concept of
composite supply under the GST law is similar to the concept of
naturally bundled services that prevailed under the service tax re-
gime, and the same was understood to refer to those transactions
involving an element of provision of service and an element of
GST LAW TIMES  23rd July 2020  155