The West Bengal Authority for Advance Ruling in February ruled that the service of transportation, in-transit insurance and loading/unloading, being ancillary to the principal supply of goods, shall be treated to taxation under Section 8 (a) of the GST Act and also to tax accordingly the consideration received on that account.
The Applicant, IAC Electricals Pvt. Ltd., is engaged in two separate contracts with M/s Power Grid Corporation of India, one for supply of materials at ex-factory price and the other for supply of allied services like transportation, insurance, loading/unloading etc. for delivery of materials at their site. It is stated that as per the Second Contract, since they are not a Goods Transport Agency they arrange for the supply and delivery of materials through various other suppliers of these services. The Contractee is unwilling to bear the cost of GST on such services provided to them by the Applicant through various Service Suppliers and hence, the Applicant, has approached the authority in want of a ruling regarding the taxability of these services supplied by them.
The Authority consisting of Vishwanath and Parthasarathi Dey ruled that, “While defining Composite Supply under Section 2(30) of the GST Act, the legislature provides an illustration. It is specified therein that supply of goods, packed and transported with insurance, is a composite supply and supply of goods is the principal supply. The illustration being part of the Section, supplies as that of the applicant’s should be construed as specifically mentioned under the GST Act as Composite Supply with supply of goods as the principal supply and services like transportation, in-transit insurance etc ancillary or incidental to the principal supply.”
