Tax on supply of Live Plants with labour work

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my Client's provideroflandscappingservices, where he supplies live plants with supplyof services as planting and maintaining the plants.

He is supplying the above live plants with 0% tax and services @ 18%.

Please adviceme. whether he is correct or wrong?

Thanks in Advance.

[Himansu Sekhar]

Live plants after uprooted from the soil are goods. They are supplied as part of the land scaping services for creation of immovable properties. The can be classified as WCS. If the contract is for the composite services, the value of the plants need to be included in the WCS. The other views are also welcome.

[Alkesh Jani]

Sir,

In this regards, the live stock, such as “Live trees and other plants” are exempted vide Sl.No. 34 of Notification No.02/2017-CT (Rates) dated 28.06.2017. However, supply of individual is exempted, if you are able to prove that the said activity is composite supply wherein supply of “Live Plant is principal supply” and rest is naturally bundled than whole is exempted from the Tax. If Mixed supply the value of Live plant is to be added in the value and GST is applicable.

Thanks,

[THYAGARAJAN KALYANASUNDARAM]

Dear sir,

It's obviously composite supply. Now my question is that which one is the principle supply. Since, the client doing landscaping work, I had a confusion which one is principal supply.

Thanks in advance.

[KASTURI SETHI]

There is no dispute that it is a composite supply. In my view, out of these two supplies 'landscaping' is a major supply inasmuch as landscaping includes beautification by way of plantation of trees and ornamental plants. Landscaping is a wider term. The purpose of live plants is beautification.GST @ 18% is applicable.

If you feel that the supply of 'live plants' is a major/main supply, opt for Advance Ruling.

[Himansu Sekhar]

I have come across such issues who have worked for municipalties or real estate agents. They have paid tax on the gross value because the contract is for landscaping job.

[KASTURI SETHI]

Sh.Himanshu Sekhar Ji,

Yes. You are absolutely right. I have also come across few decisions of AARs but these are not applicable squarely. Each case has different facts and circumstances. It depends upon the nature of the contract. That is why I also suggested to opt for Advance Ruling.

[Alkesh Jani]

Sir,

I agree with the views of Sh. Kasturiji Sir, that each case has its own facts and circumstances, moreover, when it is obviously composite supply than no confusion should take place. If supply of live plant i.e. say nursery business, the principal can be supply of plant and if registered as landscaping service, supply of plant is ancillary. The supply should be at the single price, as per your query it is mentioned as individual supply. As you are holding all the documentary evidence and also aware of facts, you are the best judge in the matter.

Further, You can also opt for provisional assessment.

Thanks

AI Summary

Composite supply: taxability depends on whether live plants or landscaping is the principal supply; principal supply controls GST treatment.
Where live plants are supplied with landscaping services, uprooted plants are goods and may be exempt; in a composite supply the principal supply determines taxability-if plants are principal the composite may be exempt, if landscaping is principal the whole supply is taxable and the plants' value must be included; factual contract terms govern characterisation and parties may seek Advance Ruling or provisional assessment.