2019 (10) TMI 1135 - AAR - GST

Tax Authority: Relocation management services not composite supply, classified as mixed supply. Role as intermediary defined.

In Re: M/s. Cartus India Private Ltd.

In Re: M/s. Cartus India Private Ltd. - 2019 (31) G.S.T.L. 500 (A. A. R. - GST), [2020] 83 G S.T.R. 80 (AAR) Issues Involved:1. Whether the services provided by the Applicant constitute a composite supply or a mixed supply under GST.2. Classification of the services provided by the Applicant under GST.Issue-Wise Detailed Analysis:1. Composite Supply vs. Mixed Supply:Applicant's Submissions:The Applicant, engaged in providing Relocation Management Services, argues that their services should be classified as a composite supply under GST. They assert that their services are naturally bundled and supplied in conjunction with each other in the ordinary course of business, with relocation management being the principal supply. They reference various legal precedents and guidelines from the erstwhile Service Tax regime and international jurisprudence to support their claim. They emphasize that their services are provided as a package and are not available separately, thus qualifying as a composite supply.Authority's Findings:The Authority examined the agreement between the Applicant and their clients. It was found that:- The Applicant acts as an agent for the client company, facilitating the provision of relocation services.- The services are chosen by the employees of the client company based on individual needs and are facilitated by the Applicant.- Each service has a separate value, and there is no single price for the entire package of services.- The actual supply of relocation services is between third-party providers and the client company, with the Applicant merely coordinating these services.Based on these findings, the Authority concluded that the services provided by the Applicant do not constitute a composite supply. Instead, they are management support services related to relocation, which are independent in nature and not naturally bundled.2. Classification of Services:Applicant's Submissions:The Applicant contended that their services should be classified as a composite supply under GST, with relocation management being the principal supply.Authority's Findings:The Authority determined that the services provided by the Applicant are not a composite supply but can be classified as a mixed supply when billed for a single price. In cases where the Applicant provides multiple services for a single price, these services do not constitute a composite supply and should be treated as a mixed supply.Additionally, the Authority noted that the Applicant acts as an intermediary, facilitating the supply of services and covered under the definition of 'intermediary.' The services provided by the Applicant as an agent are classified as 'management support services of relocation related services' under SAC 9985 and are covered under entry 23(ii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.Ruling:1. The services supplied by the Applicant do not constitute a Composite Supply and would be a mixed supply when billed for a single price in cases where the relocation-related services are actually provided by them.2. The services provided to the company as an agent are 'management support services of relocation related services,' classified under SAC 9985 and covered under entry 23(ii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.