Coal handling & distribution services can’t be considered as composite supply: AAR
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- Last Updated on 29 June, 2022
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Case Details: Authority for Advance Rulings, Tamilnadu Devendran Coal International (P.) Ltd., In re - [2022] 139 taxmann.com 243 (AAR-TAMILNADU)
Judiciary and Counsel Details
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- T.G. Venkatesh & Smt. K. Latha, Member
Facts of the Case
The applicant was engaged in import & supply of Coal and it was also providing Coal Handling and Distribution Services. After coal was imported, the coal was stockpiled at port itself at the designated place for subsequent sale to customers and Coal Handling and Distribution Services were availed by them at the port during process of procurement of coal and for fulfilling obligations towards supply of coal. It filed an application for advance ruling to determine taxability of Coal Handling and Distribution Services provided by it.
AAR Held
The Authority for Advance Ruling observed that sale of coal would take place first and ownership of coal vested with buyer and the work order for supply of service of coal handling and transportation would be entered later. The supply of goods and subsequent service of handling and transportation were two individual supplies and can’t be considered to be supplied in conjunction with each other in ordinary course of business. The sale of coal and service of coal handling and distribution can be rendered separately also and they were not naturally bundled in ordinary course of business. Therefore, the supply of coal would be liable for 5% GST and supply of service of handling and distribution would be taxable at 18% under GST.
List of Cases Referred to
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- Agarwal Coal Corporation (P.) Ltd., In re [2020] 117 taxmann.com 961/80 GST 760 (AAR – Guj.) (para 2.3).
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