In re Bharat Earth Movers Limited (GST AAR Karnataka)
Whether the supplies made by Cost Centres C,D, E and G are independent supplies of goods and services (as applicable) or composite supply with principal supply of goods?
The supplies made by the applicant under Cost Centres C, D, E and G form a composite supply and since the supply of intermediate cars is the principal supply, would be treated as the supply of intermediate cars as per section 8 of the CGST Act, 2017 and section 12 of the CGST Act, 2017 is applicable to the issues related to the time of supply.
AAAR order : Supplies by Cost Centres of BEML cannot be termed as composite supply
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
ORDER UNDER SECTION 98(4) OF CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF KARNATAKA GOODS AND SERVICES TAX ACT, 2017
1. M/S BEML Limited, 23/1, 4th Main, BEML Soudha, SR Nagar,Bengaluru 560027 having GSTIN number-29AAACB8433DIZU have filed an application for Advance Ruling under Section 97 of CGST Act,2017 read with Rule 104 of the CGST Rules, 2017 and Section 97 of the KGST Act, 2017 read with Rule 104 of the KGST Rules 2017, in FORM GSTARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the KGST Act.
2. The applicant is a Public Sector Undertaking, engaged in manufacture of wide range of products to meet the needs of mining, construction, power, irrigation, fertilizer, cement, steel and rail sectors. The applicant has sought advance ruling in respect of the following question:-
“Whether the supplies made by Cost Centres C,D, E and G are independent supplies of goods and services (as applicable) or composite supply with principal supply of goods?”
3. Regarding the admissibility of the application, it is seen that the question is about “determination of the liability to pay tax on any goods or services or both” and hence is admissible under Section 97(2)(e) of the CGST Act 2017 and Section 97(2)(e) of the KGST Act, 2017 and hence admitted.
4. The applicant has furnished some facts relevant to the issue and the same is as under:
4.1 The applicant is a Company inter-alia engaged in manufacture and supply of a wide range of products to meet the needs of mining, construction, power, irrigation, fertilizer, cement, steel and rail sectors. The applicant is also one of the leading manufacturers of rail and metro coaches.
4.2 The applicant was a successful bidder to the tender invited by BMRCL for Supply of ” 15() numbers of Standard Gauge Intermediate Cars compatible with and suitable for integration with existing trains of Bangalore Metro Rail Project Phase- 1″ procured under Contract No.2 RS-DM. The Applicant entered into a contract with BMRCL vide Contract No.3RS-DM dated 25th March, 2017.
4.3 In relation to the scope of work under the contract, the applicant states that as per the terms of the contract, the broad scope of activity to be undertaken by the applicant was to manufacture and supply the Standard Gauge Intermediate Cars along with the installation and commissioning of the cars supplied, including training, supervision of maintenance, supply of spares, preparation of manuals etc.
4.4 In order to undertake the scope of work as agreed in the contract, the applicant procures the raw materials from overseas suppliers and also from local registered suppliers. The goods so purchased is used in the manufacture of Standard Gauge Intermediate Cars which are supplied to M/S. BMRCL.
4.5 The supply by the applicant to BMRCL involves both the supply of goods and services which were to be supplied in a phased manner. The nature of supply undertaken by each of the Cost Centres of the Applicant as also forthcoming from the Contract is tabulated hereunder for ease of reference.
