Blasting activity treated as 'composite supply' under GST laws.

The Authority determined that the blasting activity conducted by the applicant constitutes a 'composite supply' of goods and services under the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017. The ruling clarified the tax treatment applicable to such composite supplies, emphasizing that the blasting work involving explosives falls within the scope of both goods and services, as per relevant legal provisions and a Supreme Court judgment.

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Issues involved:
Determining whether blasting activity constitutes a 'supply of goods' or 'supply of services'.

Analysis:
The applicant, engaged in blasting work using explosives, sought clarification on the nature of their activity. They argued that since they retain control over the explosives throughout the process, the activity should be classified as a 'supply of service.' The applicant highlighted that the client is not authorized to handle explosives, indicating that no transfer of ownership occurs during the blasting activity.

The Authority considered the applicant's submissions and the relevant legal framework, including Section 7 of the Central Goods and Services Tax Act, 2017, and the Gujarat Goods and Services Tax Act, 2017. Referring to a Supreme Court judgment in the case of State of Gujarat Vs. Bharat Pest Control, the Authority emphasized that the scope of supply is not limited to Schedule II and can encompass both goods and services. In this context, the Authority concluded that the blasting activity involved a composite supply of goods (explosives) and services (blasting work) under Section 2(30) and Section 8(a) of the CGST Act, 2017 and the GGST Act, 2017.

In light of the above analysis, the Authority ruled that the blasting activity conducted by the applicant constitutes a 'composite supply' of goods and services, falling within the purview of the relevant tax legislation. The ruling clarifies the classification of the applicant's operations, providing guidance on the tax treatment applicable to such composite supplies in the context of GST laws.

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