TaxTMI 
TaxTMI 
2018 (10) TMI 257
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....de a bid for a tender floated by the Indian Railways for supply of locomotive engines and their comprehensive maintenance. In pursuance to the bid, the applicant has been awarded a contract by President of India represented by Director, Mechanical Engineering (Works), Ministry of Railways ('Indian Railways') Government of India for setting up of factory at Bihar for assembly/ manufacture of locomotives for supply to Indian Railways and comprehensive maintenance of said rail locomotives. 3. The applicant in this application dated 15-2-2018 has raised following issues for determination by the Authority - (a) Whether supply of comprehensive annual maintenance service which may also involve incidental supply of spare p....
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....first locomotive maintenance shed is being setup in the State of Uttar Pradesh and the second locomotive maintenance shed will be set-up in the State of Gujarat in future. Further, the consideration for comprehensive annual maintenance is pre-agreed as a percentage of the locomotive price. The copy of the agreement executed between the applicant and Indian Railways for the said scope of work was also submitted. 5. On the basis of the facts disclosed in the application, the oral and written submission made at the time of personal hearing and the documents produced during the personal hearing, it was decided to admit application. 6. As per Section 2(30) of CGST Act, 2017/SGST Act, 2017 defines composite supply to mean - "....
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....rits to be considered to be a composite supply of service and principal supply is service inasmuch as the supply of goods is merely incidental to the maintenance contract in the given facts and circumstances. In terms of Section 8 of the CGST Act, 2017 / SGST Act, 2017, it has been clarified that a composite supply comprising two or more supplies, one of which is a principal supply would be treated as supply of such principal supply. The relevant extract of Section 8 of the CGST Act provides as follows : "8. Tax liability on composite and mixed supplies. - The tax liability on a composite or a mixed supply, shall be determined in the following manner, namely- (a) a composite supply comprising two or more supplies, one of whic....
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....e of supply has been defined to be the location of such person. The relevant extract reads as follows :- "12. (2) The place of supply of services, except the services specified in sub-sections (3) to (14), - (a) made to a registered person shall be the location of such person;.." 10. The Service Code for the maintenance and repair service of transport machinery and equipment is 998714 and the prescribed rate of GST is :- CGST @ 9% of the taxable value SGST@ 9% of the taxable value or IGST @ 18% of the taxable value. Where the service provider and service recipient of a service are located in India, the provisions of Section 12 of the of IGST Act, 2017 determine the plac....
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....; In view of the above, we rule as under : RULING 13. The point-wise clarifications are as under :- (a) Whether supply of comprehensive annual maintenance service which may also involve incidental supply of spare parts/goods should be classified as a composite supply or mixed supply? Ans. - Since the supply of maintenance service is for a one and fixed price with or without supply of spare parts/goods and supply of service and goods is made in conjunction with each other in the ordinary course as per maintenance contracts, this maintenance service to the extent of presence of all the necessary ingredients cited in the legal provisions quoted supra, is naturally bundled with the incidental supply of goods., it is case of co....