TaxTMI 
TaxTMI 
2025 (4) TMI 226
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....ssified under HSN 9609 9030 leviable to GST @ 12% as per entry No. 233 of schedule-II of CGST Act, 2017; • the applicant intends to insert a 'Scraping Tool' in the said pack of oil pastels & has re-labelled it as 'Apsara Oil Pastels with free scraping tool'; • the scraping tool is a small tailor-made product of plastic (3 x 3 cms.) and comes in fancy shapes like Duck or Bird; that it can be used to scratch the surface coloured with the oil pastels to create and enrich designs, drawings, and patterns in the coloured areas by removing layers of oil pastels from a drawing and reveal a different colour or layer underneath; that the picture of the scraping tool is as under: • that the scrapping tool is independently classified under 3926 9080 and taxed at 18% as per entry 111 of schedule-III of CGST Act, 2017. 4. The applicant is further of the view that though the supply of oil pastels includes the scraping tool, there is no supply of scraping tool since they are making only one supply i.e. supply of oil pastels which is classifiable under 9609 9030 & is leviable to GST @ 12% under entry 233 of schedule-II of CGST Act, 2017, owing to the follow....
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.... the customers as it is a main supply and scraping tool included in the pack is an accessory. The customers can use oil pastels without the scraping tool but not vice versa. The scraping tool is integral to the use of the principal product, ie oil pastels. The scraping tool compliments the use of oil pastels by enhancing the beauty and aesthetics of the drawing and sketches coloured by using the oil pastels. Other than being used along with the oil pastels, the scraping tool does not have any utility by itself. 6. In view of the aforementioned facts, the applicant has asked following question in their application for advance ruling viz i. Whether inclusion of a free 'Scraping Tool' in the pack of Apsara Oil Pastels amounts to independent 'supply' of the scrapping tool under Section 7 of the CGST Act, 2017?; ii. What will be the classification and rate of tax on supply of the 'Apsara Oil Pastels with Free Scraping Tool' under the provisions of the CGST Act, 2017 and the GGST Act, 2017? 7. Personal hearing was granted on 03.01.2025 wherein Shri Parind Mehta, CA along with Shri Sanjay Gupta, CFO appeared on behalf of the applicant and reiterated the facts as st....
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.... their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought. 10. Before adverting to the submissions made by the applicant, we would like to reproduce the relevant provisions for ease of reference: • Section 2. Definitions (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; (74) "mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price wher....
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.... in the course or furtherance of business. Now, applicant's contention is that the scraping tool, included in the supply of Apsara oil pastels, since it is a free supply without any consideration, should not be considered as a supply. They have tried to substantiate this via the table under paragraph C-5, which is reproduced supra. We however, find the averment not tenable owing to the following: [a] that it is factually undisputed that there is inclusion of scraping tool in the kit containing 'Apsara oil pastels with free scraping tool'; [b] that there is a supply of scraping tool involved in the sale of 'Apsara oil pastels with free scraping tool'; [c] that the aforementioned sale of entire kit is for a consideration, which is an undisputed fact; [d] singling out an element in a kit to hold that there is supply of all the elements in the kit except scraping tool on the ground that no consideration was charged, is not a rational argument which is even otherwise not supported by section 7, ibid. In view of the foregoing, we hold that there is a supply of scrapping tool which is very much a part and parcel of the kit containing 'Apsara oil past....
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....phasis supplied] 14. The applicant, we find has relied on two rulings [a] M/s. Page Industries Ltd; [b] M/s. Surfa Coats (I) P Ltd. On going through both the rulings, we find that the facts of the matters are totally different, having no similarity to the present facts at hand. We would like to reproduce the questions on which the ruling in the aforementioned cases were sought, just to clarify the matter: [a] M/s. Page Industries Ltd; The question on which ruling sought was as under:' "Whether in the facts & circumstances of the case the promotion products/materials & marketing item used by the appellant in promoting their brand and marketing their products can be considered as 'inputs' as defined u/s 2 (59) of the CGST Act, 2017 & GST paid on the same can be availed as ITC in terms of section 16 of the CGST Act, 2017 or not?" [b] M/s. Surfa Coats (I) P Ltd. "Whether the applicant is eligible to claim the GST ITC on the items purchased for furtherance of business? Hence, the reliance sought to be placed on the above rulings is not tenable. 15. The second averment of the applicant is that even if it is held that there is a supply....
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....€¢ Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. • The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. For example service of stay in a hotel 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 actu....