TaxTMI 
TaxTMI 
2025 (2) TMI 128
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....Act, 2017 by M/s. DOMS Industries P Ltd., (hereinafter referred to as Appellant) against the Advance Ruling No. GUJ/GAAR/R/2022/52 dated 30.12.2022. 3. Briefly, the facts are enumerated below for ease of reference: • the appellant is a manufacturer & supplier of stationery items; • the applicant supplies the goods in a combination with other products viz [a] DOMS A1 pencil. This consist of 10 pencil along with a sharpener & eraser. [b] DOMS Smart Kit. This is a gift pack which consists of a colouring book, two pack of pencils, one pack of colour pencil, one pack of oil pastels, one pack of plastic crayons, one pack of wax crayons, one eraser, one scale and one sharpener. [c] DOMS my first pencil kit. It consists of a pencil, eraser, scale and a sharpener. • That consequent to the 47th meeting of the GST Council, vide notification No. 6/2022-CT (R), GST rate was increased on pencil sharpener, Scales & mathematical instruments sets from 12% to 18%; • the applicant feels that he satisfies the four conditions to term the aforesaid supply as 'composite supply'. 4. In view of the foregoing facts,....
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.... the product whether sold individually or in sets; • that the mechanism of classification of the goods along with the GIR as stipulated under Customs Law would apply under GST as well; • that where goods are classifiable under two or more heading, classification needs to be undertaken based on Rule 3 of GIR; • that in case of sale of 'composite goods consisting of different materials/components and goods put up in sets for retail sale, Rule 3(b) of GIR is to be applied; • explanatory notes define the term 'goods put up in sets for retail sale'; • further for determination of the goods which provides essential characteristic, reference can be made to the explanatory notes issued by WCO; • that since all the conditions as specified in explanatory notes for the term 'goods put up in sets for retail sale' is satisfied & since pencil provides the essential characteristic, the HSN code to be used for DOMS A1 pencil should be the one applicable; • GST Council in its 47th meeting recommended change in GST rate vide notification No. 6/2022-CT (R) wherein the GST rate was increased ....
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.... have carefully gone through and considered the appeal papers, written submissions filed by the appellant, submissions made at the time of personal hearing, the Advance Ruling given by the GAAR and other materials available on record. 10. To summarize, the GAAR vide its impugned ruling held that supply of sharpener along with pencil, is a mixed supply; that in case of mixed supply, comprising two or more supplies, shall be treated as supply of that particular supply attracting higher rate of tax; that supply of sharpener [along with kit] having nominal value, will have an impact on rate of tax. 11. On going through the grounds & prayer of the appellant, it is forthcoming that the appellant is aggrieved only in respect of their product 'DOMS A1 pencil', which consists of 10 pcs of pencil, one eraser and one sharpener. We therefore, limit our ruling to the said product only. 12. The averment raised by the appellant is that for determination of the goods which provides essential characteristic, reference can be made to the explanatory notes issued by WCO; that as pencil provides the essential characteristic, the HSN code to be used for DOMS A1 pencil should be the one....
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....el is often combined with a service or laundering of 3-4 items of clothing free of cost per day Such service is an ancillary service to the provision of hotel accommodation and the resultant package would be treated as services naturally bundled in the ordinary course of business. • Other illustrative indicators not determinative but indicative of bundling of services in ordinary course of business are - • There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use • The elements are normally advertised as a package. • The different elements are not available separately. • The different elements are integral to one overall supply if one or more is removed, the nature of the supply would be affected • No straight jacket formula can be laid down to determine whether a service is naturally bundled in the ordinary course of business. Each case has to be individually examined in the backdrop of several factors some of which are outlined above. 14. As is evident, though issued in respect of services, the analogy of the word naturally bundled ca....
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....(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 17. We note that in paragraph 21.2, GAAR, has addressed the aforementioned contention. The relevant extract of the CGST Act, 2017, which governs the nature of the such supply, states as under: Section 2. Definitions.- In this Act, unless the context otherwise requires,- (30) "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 insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; ....
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....fication ruling, we find that it is for a sample identified as Disney Ruler Stationery set, consisting of two regular pencils, one eraser, one pencil sharpener & one ruler. The Ruling classifies the product under 9609100000 by relying on GRI 3(b), holding the pencil to be providing an essential character to the product. However, what needs to be understood is for making a judgement applicable, the facts are to be similar. Any distinction, would render the reliance, untenable in law. We are not aware as to whether the definition of composite, mixed supply are the same. Further, there is nothing produced on record, to substantiate, that there is a section in the US customs, similar to Section 8 of the CGST Act, 2017. In view of the foregoing, we find that the reliance is not legally tenable. [b] Rulings in the case of Baroda Medicare P Ltd 2021 (55) GSTL 495 (AAR-GST-Guj). Sameera Trading Company 2019 (31) GSTL 375 (AAR-GST-Guj) South Indian Federation of Fishermen Societies 2021 (52) GSTL 466 (AAR-GST-Ker), Jainish Anantkumar Patel 2022 (59) GSTL 111 (AAR-GST-Guj) and HP India Sales P Ltd. 2019 (29) GSTL 756 (AAR-GST). We have gone through the facts of the aforementioned....