AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1865
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under GST having GSTN: 09AABCP5806H1ZE. 2) The Applicant is engaged in the sale of motor vehicle parts and accessories. The Applicant has entered into an agreement with Hyundai Motors India Limited ("HMIL") for providing repair services to the customer on behalf of HMIL during warranty period. The Applicant receives consideration towards labour charges for providing repair services and also reimbursement of cost of parts replaced, if any, to the customer during the warranty period. 3) The Applicant has submitted application for Advance Ruling dated 13.12.2018 enclosing duly filled Form ARA-01(the application form for Advance Ruling) along with annexures and attachment. 4) The Applicant in his application sought clarification and Advanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d submission, which they were allowed. DISCUSSION AND FINDING 7) We have gone through the submissions made by the applicant and examined the detailed explanation submitted by them. We observe that the questions sought by the applicant are:- i) Whether repair services carried out by the Applicant under the Dealership Agreement with HMIL, to fulfill the warranty obligation of HMIL which also involves supply of parts should be classified as a composite supply of services under Section 2(30) of CGST Act / Section 2(30) of SGST Act, 2017? ii) Whether the entire repair services including supply of spares can be classified under S. No. 25 in Notification 11/2017-Central Tax (Rate) dated 28th June, 2017/ parallel Notification issued under SGS....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ided by PCSL to HMIL:- As per para 1.6 of Exhibit I attached to Form ARA-01, the repair charges comprises of reimbursement for:- a) Labour charges and b) Parts at parts markup rate. 10) Current invoicing methodology:- The warranty repair provides by the company to HMIL is currently considered as composite supply of services and the services including the incidental supply of parts are subjected to tax under SAC 998729 "maintenance and repair services of the other goods". The below table illustrates the components of the final summary issued to HMIL:- S.No. Category Description SAC IGST Rate 1 Part Details Latch Assy - Trunk Lid 998729 18% 2 Labour details Trunk Lid Latch Assy 998729 18% 11) Applicant's view point a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 2(30) of SGST Act, 2017? As per the information provided by the applicant, Hyundai Motors India Limited (HMIL) provides "Warranty Repair Services" to its customers in respect of vehicles purchase by them under 'Warranty Policy' free of cost which is carried out by them being an Authorised Dealer of HMIL. They undertake repair services of the vehicles along with replacement of defective parts, if any at no costs to the customers for labour/defective paqs. HIVIIL reimburses them for repairing services along with replaced parts, if any. ii) It was further intimated by the party that there could be the scenarios where "Warranty Repair Service" provided by them involve only the labour charges without any replacement of defective....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plied 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 insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply. b) Section 2 (90) of CGST/SGST Act, 2017 provides that - " 'Principal Supply' means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply fon-ning part of that composite supply is ancillary." iii) From the submissions made by applicant, it appears that they are mainly providing 'Repair & Maintenance Services' to their customers under "Warranty R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e provisions of the GST laws we find that supply of services/ parts is naturally bundled, with the supply of parts being incidental to the supply of services and therefore, such contract are to be considered as a 'composite supply' of services where the principal supply is services and the supply of goods (Parts) is incidental to such supply of services. vi) Further, Section 8 of CGST/SGST Act, 2017 provides that - The tax liability on a composite 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." (b) In view of above statutory provision as stipulated under Section 8 of CGS....