TaxTMI 
TaxTMI 
2022 (4) TMI 1142
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.... Puram, Coimbatore-641002 (hereinafter called the Applicant) are registered under GST with GSTIN 33AABCD3577F1ZZ. The applicant has sought Advance Ruling on the following questions:- 1. Whether we are liable to discharge tax liability at 18% on coal handling and Distribution charges collected in respect of supply of coal handling and distribution services rendered as per a work order issued by the customer subsequent to his coal (only) order Or Can we club the aforementioned coal handling and distribution service ordered by customer separately and subsequently with 'supply of coal' to understand that as a composite supply of coal and pay GST at 5%? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that on purchase of coal, the GST is paid at 5% (on intra-State and inter-State supply as the case may be) and on import of coal from overseas market, IGST is paid @ 5%. After coal is imported, the coal is stockpiled at port itself at the ....
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....usly skip it too. In most of the cases the customer decides to take up their Coal Handling and Distribution Service, subsequent to ordering for 'Only Coal' - mostly in the last hour too, since dynamic search for lower quote for such service in Port carried out by the customers. Further, as per the terms agreed with customer, on placing the order for desired quantity of coal, separate invoices to be raised by the Applicant on a customer for- (a) Price of supply of coal (b) (In the applicable cases, when separate and subsequent order received from customer) Coal handling and distribution charges The applicant has stated that they intend to raise invoice on the customer(s) for the following- (a) Supply of 'coal only1 with GST at 5% (b) Composite Supply of Coal and Coal handling and distribution with GST at 5% (c) (i) Supply of standalone service 'Coal handling and distribution service only with GST at 18% (ii) supply of coal handling and distribution service as per customer's work order therefor subsequent to his coal order with GST at 18% 2.3 On interpretation of law, the Applicant has stated that supply ....
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....t possession what are all the types of contract entered into iv. write up on practice followed in pre-GST and post GST era until now. 3.2 The applicant vide their letter (received on 12.01.2022) submitted the following documents/facts.,- • Write Up on different type of Supply undertaken and reference to related purchase orders The customers prefer following types of supplies from them nowadays, as evidenced by their Orders,- a. Supply of Coal only (no Transportation or other Service is required from applicant) b. Supply of Coal Handling and Transportation Service only (Coal is theirs; they do not want applicant to supply any goods) c. Supply of Coal as well as Coal Handling and Transportation Service,- i. When single and comprehensive order for 'Principal Supply of (Coal) Goods' as well as 'Ancillary Supply of Coal Handling and Transportation Service', we do Composite 'Supply of Coal'; there is no query ii. But, this application refers to the following situation faced by applicant in recent time,- "First the Purchase Order for Supply of Coal only (no service is required from ap....
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....too. If they do so, it is purely Sale of Coal (goods) only. But several customers ask them to do Door Delivery at their factory gate too In such case, the applicant charges overall unit rate factoring the transportation charges and did composite Supply of Coal (with Handling and Transportation) till factory gate of the buyer - as required in their single comprehensive order). • Domestic Coal purchased by applicant-Modus Operandi In case of domestic purchase, the coal is purchased in bulk and stored in applicant's own stockyard. When they receive order from the customer for supply of coal, they do. As already mentioned, all these days they used to get order to deliver the coal at the factory gate of the buyer by a single comprehensive order. We did such composite supply of coal (with Handling and Transportation till factory gate of the buyer - as required in their single comprehensive order). During the recent pandemic, considering the price trend of coal the buyers (of imported coal as well as domestic coal) have started to try their level best to reduce their cost by selecting the low cost Handling and Transportation (price of quality coal is not....
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....ax only on goods i.e coal and also on the services under RCM. However, from the returns it is not clear as to why the supply part of handling and distribution service has been merged in to the coal value and making it consolidated. • The handling and distribution services attract 18% GST and not 5% wherever supply of such services only is intended to be expressly made to a customer. 5. The State Jurisdictional authority has stated that there are no pending proceedings in the applicant's case. 6. We have considered the application filed by the applicant and various submissions made by them as well as the comments of the Central Tax officers. Applicant is engaged in the business of trading of coal in India, procured by them in the domestic market as well as imported from overseas. They purchase coal by paying 5% GST and import coal by paying 5% IGST. They stock pile the coal at the port at the designated place and subsequently sell it to their customers. Further they render coal handling and distribution services to customers who wish to purchase coal and wish to avail services of loading, unloading of material at site, storage, adequate water sprinkling, custo....
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....ay 8-15 (say, 11.05.2021) iii. Their Invoice for Sale of Coal - on Day 2 or Day 3 (rarely they raise invoice finally - say, on Day 8-15) iv. Their Invoice for Handling and Distribution Service - Day 8-15 (rarely they raise invoice finally - say, on Day 18 or Day 19) Thus it is seen that the orders are raised as independent purchase/work orders at different times. They have mentioned that they used to receive orders to deliver the coal at the factory gate of the buyer as single order; that in the pandemic time, considering the price trend of coal, the buyers, of both the imported as well as domestic coal, have started to try their level best to reduce the cost by selecting the low cost Handling and Transportation; that when the buyers are unable to find suitable service provider quoting low cost of transportation, they come back to the applicant with a separate order for handling and transportation service. The applicant themselves have stated that such supply of coal and Handling and Transportation service rendered through independent contracts do not form part of a composite supply since there is a noteworthy gap in different contracts. They have further state....
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....e the services are rendered in respect of the buyer's goods and therefore the supply of such service is not made in conjunction with the sale already made and not a composite supply. 8. Applicant had produced copies of Purchase orders issued by M/s. MPM Pvt Ltd., Nagpur vide Ref: MPM/PUR/NGP_J-14/DCIPL/001 dated 03.05.2021 for purchase of coal @5%GST from the applicant, wherein it has been mentioned that the transportation and freight will be arranged by the buyer and that they will plan placement of vehicles to lift the ordered material. Subsequently, a work order ref: MPM/PUR/NGP_J-14/DCIPL/WO: 001 dated 11.05.2021 has been issued by M/s. MPM Pvt Ltd for provision of Coal Handling &Distribution at the rate of 18%GST. When applicant was required by us to furnish copies of invoices pertaining to these purchase orders, applicant vide letter dated .25.03.22 have stated that they have not raised any invoice till date in respect of the two purchase orders received by them. Hence from the documents furnished, it is observed that the supply of goods and subsequent service of Handling and Transportation have been two individual supplies and cannot be considered to have been supplie....