The AAR, Uttar Pradesh in the matter of Premier Car Sales Ltd. [Order No. 29 dated 11, March, 2019] has held that, repair services carried out under an agreement, by the Assessee engaged in sale of motor vehicles parts and accessories, to fulfill the warranty obligation, which also involved supply of parts could be classified as a composite supply of services under Section 2(30) of the Central Goods and Services Tax Act, 2017 (CGST Act), where the principal supply is services and the supply of parts is incidental to such supply of services.
M/s Premier Car Sales Ltd. (“the Applicant”) is engaged in the sale of motor vehicle parts and accessories. The Applicant has entered into a dealership 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.
The AAR, Uttar Pradesh in the matter of Premier Car Sales Ltd. [Order No. 29 dated 11, March, 2019 held as under:
Section 2(30) of the CGST Act:
“`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.”
S. No. 25(ii) in Services Rate Notification (as amended):
|S. No.||Heading||Description of Service||Rate||Condition|
|25.||Heading 9987||(ii) Maintenance, repair and installation (except construction) services, other than (i) and (ia) above and serial number 38 below.||9||–|
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