TaxTMI 
TaxTMI 
2019 (8) TMI 1218
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....composite supplies b) Whether showing and charging freight and insurance portion separately in invoice would attract GST. c) If as per (b) above, no GST is chargeable, whether they can have two different type of treatments i.e. in one case GST is being paid on freight (since all other state electicity boards have agreed to pay GST on freight and insurance portion) and in other case of PG, GST on freight being on tended/not paid. d) whether as per the inclusion specified in section 15(2) which is to be added to the transaction value i.e. "incidental expenses, such as commission and packing, charged by the supplier to the recipient of a supply, including any amount charged for anything done by the supplier in respec....
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....siness, one of which is a principal supply: Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply" 3.4 The applicant mentioned that as per the given definition and considering nature of product, ABI is a principal supply and freight and insurance is part of composite supply; that applying contention of naturally bundled product, it is not possible to sell the product without freight and insurance; that if it had been situation if ABNL is not selling goods to Power Grid, it will never charge for freight and insurance and that not with standing with above, if Adity Birla Insulator is not ch....
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....or a decision in the matter. 4. The Central Goods and Services Tax Additional Commissioner, Vadodara-II inter-alia informed that the The Grasim Industries Limited's opinion is according to Definition of composite supply as per GST Act. 5.1 The composite supply is defined under section 2(30) of The Central Goods and Service Tax Act, 2017 ""composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insuranc....
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....ourse of business as mentioned in the CBEC & C Flyer no. 4 and the case of the applicant is the similar one. The above is applicable to the case of the applicant and hence Ex works plus freight and insurance to be treated as composite supplies 6.3 It is clearly mentioned in the CBEC & C Flyer no. 4 dtd. 01.01.2018, under "Determination of tax liability of Composite and Mixed Supplies" that "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 which is a principal supply, shall be treated as a supply of such principal supply; and ......" In the case of the applicant the ex works is principal supply an....
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....d (e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments. Explanation.--For the purposes of this sub-section, the amount of subsidy shall be included in the value of supply of the supplier who receives the subsidy." As per the above, it is very clear that freight and insurance, charged by the supplier to the recipient of a supply, is included in the value for charging of tax under The Central Goods and Service Tax Act, 2017 and Gujarat Goods & Services Tax Act, 2017. 6.6 Now the question: One of the inclusions specified in section 15(2) which is to be added to the transaction value under GST is: "Incidental expenses, such as commission and p....
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....and insurance portion separately in invoice would attract GST. Answer: GST is chargeable. There cannot be different type of treatments of tax liability on supply of different goods/services naturally bundled together. Question 3: If as per (2) above, no GST is chargeable, whether they can have two different type of treatments i.e. in one case GST is being paid on freight (since all other state electricity boards have agreed to pay GST on freight and insurance portion) and in other case of PG, GST on freight being contended/not paid. Answer: not applicable as GST is chargeable. Question 4: One of the inclusions specified in section 15(2) which is to be added to the transaction value under GST is: "Incidental expenses, su....