CIF composite supply blocks separate GST on freight service component; place-of-supply reliance could not sustain the demand.

In a CIF transaction, transportation services were treated as part of a composite supply naturally bundled with the import of goods, so the freight component could not be isolated for a separate GST levy. The court applied the IGST place-of-supply framework and binding CIF precedent to hold that the Revenue had wrongly invoked place-of-supply provisions to impose additional tax on the service element. The impugned show cause notice and demand were therefore unsustainable and were quashed and set aside.

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Issues: Whether GST could be levied on the freight service component in a CIF transaction by treating the place of supply as India under the relevant IGST provisions, and whether the impugned show cause notice and demand were liable to be set aside.

Analysis: The service of transportation in a CIF contract was treated as part of a composite supply, with the supply of goods and related services naturally bundled together. The Court applied the principle that such a transaction cannot be dissected to impose a separate tax on the service component when the composite supply has already been brought to tax as part of the import transaction. Relying on the governing GST framework and the binding precedent on CIF contracts, the Court held that the Revenue had wrongly invoked the place of supply provision to fasten an additional GST liability on the petitioner. On that basis, the impugned notice and order could not be sustained.

Conclusion: The GST demand on the petitioner was unsustainable, and the impugned show cause notice and order were quashed and set aside.

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