GST on supply of mud engineering services along with supply of imported mud chemicals and additives

In re Halliburton Offshore Services Inc. (Oil India) (GST AAR Andhra Pradesh)

(a). Whether the supply of mud engineering services along with supply of imported mud chemicals and additives provided on consumption basis by the Applicant under the Contract qualify as composite supply.

it is observed that there are independent qualitative, quantitative and logistic (mobilization, deliver}7, replacement of deficient or substandard materials, demobilization thereof etc.) compulsions with reference to procurement by the applicant, clauses for sub-contracting of petty services, subsequent delivery’ (or supply) to M/s OIL and usage (or consumption) of additives / chemicals in mud engineering activity and drilling waste management services. It is also observed that there are similar conditions prevailed independently to Technical Personnel and technical equipment (including laboratory equipment) separately. Thus, it is clear and evident that the different components namely, technical personnel, technical equipment and additives/chemicals/consumables are separately available for procurement and supply by the applicant, it Is therefore, understandable that supply of mud additives and chemicals cannot be said to be supplied in conjunction with supply of services (technical assistance by way of supply of technical personnel) and supply of other goods namely technical equipment.

As the essential second criteria of ‘supplied in conjunction with’ had not been complied, the supply of mud engineering services along with supply of imported mud chemicals and additives provided on consumption basis by the Applicant’ under the contract do not qualify and classifiable as ‘composite supply’.

 And therefore, the supply of imported mud- chemicals and mud additives provided on consumption basis shall be classifiable as supply of goods under respective HSNs of goods as specified under CGST Act, 2017. Similarly, it is found that the other events supply of goods (on rental basis) and supply of services (supply of technical personnel) shall be accordingly classifiable independently under respective HSNs of Services/Goods as the case may be.

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