TaxTMI 
TaxTMI 
2019 (8) TMI 1283
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....akkal District 637 214, (hereinafter referred to the 'Applicant'), is engaged in manufacture and supply of Complementary Weaning Food containing Amylase Activity to the Department of Integrated Child Development Services, Government of Tamil Nadu. The applicant is registered under the GST Act with GSTIN.33ADOPK5292P1ZT. They have sought Advance Ruling on the following questions: 1) What is the rate of GST applicable for transportation of goods using the vehicle owned by the supplier for delivering the goods at the place as per direction of the ICDS Department and apart from selling the goods as per contract entered with Department of Integrated child Development Services (ICDS), Government of TamilNadu? 2) Whether the transport service provided by them would come under Goods transport Agency service or not? 3) Whether supply of goods and transportation charge provided to an unregistered person, in this situation whether GST is applicable or not? If applicable, what is the Rate of GST for Transportation charges for using the vehicles owned by the suppliers? 4) If the supplier supplies the goods at the delivery point of the buyers and supplier rais....
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....on on the Rate of GST applicable for transport charges received for transportation of the above said food items through the vehicle owned by them. 2.3 The applicant stated that in respect of Supply using own vehicle they are of view that supply of goods and transport service are integral parts, even though invoices are raised separately for goods and transportation charges. Hence this transaction will be covered under composite supply and rate of GST for applicable for goods will be applicable for transportation charges. 3.1 The applicant was heard on 22.05.2019. The applicant appeared and submitted copy of the recent Tender document and Agreement copy dated Feb 2019. They stated that they are supplying food preparation as specified in tender under ICDS scheme directly to Block officer & Anganwadi Center. The product is packed in 1 kg and 2 kgs and unit packed of these packets. They stated that the tender itself specifies that the transportation charges are included in price and also specified in agreement. However, they have been invoicing separately for food and transport at 5%. They stated that it would be a 'composite supply' with principal supply of goods and tax rate sh....
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....sportation of goods provided to an unregistered person and on the supply of goods appropriate GST will be applicable. • Based on the transaction illustrated by the taxpayer/ applicant, the supply of goods and transportation of goods will not fall under the category of "Composite Supply" as it is not a natural bundle in as much as the transportation of goods, actually carried out by the taxpayer, can be provided by any person, i.e., by a consignor or consignee or by a GTA other than the consignor or consignee. 5. The State Jurisdiction Officer has offered their comments on the query raised by the applicant, which, is given below: • The terms and conditions for the supply of complementary weaning food containing Amylase Activity (OOTA SATHU VUNAVU) at Page 9. Bid price 1 (2) (d) clearly noted as charges on transportation, shall be indicated separately as follows:- (i) From factory to project level and (ii) Project to center level. For evaluation, transportation charges will be included with price of goods.- This shows specific transport charges not collectable by the seller. • As per agreement entered by the applica....
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....', 'Packing & Forwarding', 'Transportation-Factory to Block/ Project', 'Transportation- Block/ Project to Center' and 'Insurance and other local costs incidental to delivery'. All of this together is used to arrive at the 'Unit Price per MT'. • As per Para 9(2) of the Bid Document, 'For evaluation, transportation charges will be included with the price of goods'. The bidder's separation of price components will be solely for the purpose of facilitating comparison of bids by the purchase. • As per clause 9(5) of the Bid Document 'Price quoted by the Bidder shall be fixed during the Bidder's performance of the Contract and not subject to variation on any account except changes in applicable statutory taxes and duties, etc. • Evaluation of Bid specified in Para 24 states that the evaluation will take into account cost of inland transportation for delivery of goods to final destination. • Para 36 specifies the conditions for packing • As per the bid document (Para 37), the Delivery of the goods is to be made by the supplier as per the schedule of Requirements. The schedule of Requirements enclosed as Annexure-II(a) to the....
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....pplicable taxes and duties, if any. Supplemental agreement dt 01.12.2017 was executed to revise unit price per MT exclusive of applicable taxes. 6.3 The applicant submitted another tender / bid document dt 01.02.2019 where the terms and conditions have broadly remained the same. This led to an agreement dt 06.03.2019 in which the unit price is revised and is inclusive of Rs. 3400/- per MT for transportation and Rs. 2994/- per MT for 5% GST on food and transportation cost. 6.4 The applicant has further submitted that they are raising two invoices for supply of the product to the Anganwadi centers, one for the product and one against the Transportation Charges. They have submitted copies of the following two invoices for perusal: a. Inv.No. CWF 2/2019-20 Dt.30.04.2019 for Rs. 5931/- towards supply of 0. 100 Mts. Of the product, charging CGST @ 2.5% and SGST @ 2.5% with HSN 1901 at Rs. 56490/- per MT. b. Inv.No. CWFT 2/2019-20 Dt.30.04.2019 for Rs. 294/- towards transport charges for the supply of 0.100 Mts. of the product, charging CGST @ 2.5% and SGST @ 2.5% with SAC 996511 at Rs. 2800/- per MT. On perusal of the invoices, it is seen that the applicant ....
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....te. The applicant is paid at Per MT price, which includes transportation charges. The Bid document clearly asks for a breakup of the bid price for each unit/ MT under the heads of 'Ex-factory/Ex-warehouse Ex-showroom/ Off-the-shelf, 'Excise duty if any', 'Packing & Forwarding', 'Transportation- Factory to Block/ Project', Transportation- Block/ Project to Center' and 'Insurance and other local costs incidental to delivery'. All of this together is used to arrive at the 'Unit Price per MT' which is the bid price. Evaluation will take into account cost of inland transportation for delivery of goods to final destination. The bid and the agreements only mention a total quantity to be delivered in during the period in all destinations put together. It does not specify how much amount will be delivered at what place. These details would be mentioned in separate indents raised. Para 39 of bid document specifies that payment will be made only after confirmation of delivery and verification of stock entry certificate at each center. This means that the food packets reaching the destinations which are the Anganwadi centers will alone complete the obligation of the applicant as per the contra....
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....o decide whether these two taxable supplies are naturally bundled, we have to examine the actual contract/ agreement. In this case, the recipient ICDS department intends to serve nutritious weaning food to children through the ICDS/Anganwadi centers all over the State. They could have procured the food from one supplier, aggregate all and then again distribute to each of these center using their own resources or a third party contractor for the same. However, in order to ensure quality and supply of food within prescribed time limits, they have chosen to keep the responsibility of the delivery to the supplier of the food himself. In this case, it eliminates further agreements and more importantly, ensures timely delivery of fresh and quality food. This would also give them the flexibility to get the right quantity to each center at the time of requirement. Accordingly, the bid document clearly indicates that the bidder shall have the responsibility to deliver the specified quantities to all the centers. The bid price is also made inclusive of a fixed transportation charge instead of an actual basis. The applicant is also prohibited from assigning or sub lease any part of the contra....