Highest GST Rate is applicable for Mixed Supply of Services billed at a Single Price: AAR [Read Order]

The Authority of Advance Ruling ( AAR ) in Tamil Nadu held that the mixed supply of services that are billed at a single price is liable for a highest GST rate of the services supplied ie. 18%.

The ruling was made by bench comprising of members Ms. Manasa Gangotri Kata, IRS Member, CGST and Thiru KurinjiSelvaan V.S Member. TNGS in the case of M/s. R.B. Shah Enterprises India Pvt Ltd, who has sought Advance Ruling on the question of what is the applicable rate of GST for the service provided for a whole sum price.

The applicant supplies consultancy services to the clients relating to the Customs/DGFT/other statutory requirements for the import of goods. by advising, updating on the incentives available, facilitating for the same, documents preparation related to duty payments, tracking of the goods, etc. they provide along with Contract of duty credit scrips facilitation & its accountability, documents preparation related to duty payments like Bill of Entry, etc., Document Management system(DMS i.e., Storage of Hard copies, Soft Copies and Data Entries), Goods transport track, redemption of scrips and refund of additional duties from Customs if any. The service order is to support the compliance of Customs and DGFT up to the clearance including credit scrips facilitation. This involves procuring the duty credit scrip from an exporter and supplying it to the client of the applicant.

The court found that the stated services are supplied along with supplying of the duty credit scrip as seen in the invoice and service order. The applicant is billing the client for a single lumpsum payment. It is seen that the duty credit scrip is purchased by the applicant by means of transfer, which means that the scrip belongs to the applicant and he can import goods against the scrip if he chooses so. The applicant further retransfers the scrip to his client. Both these activities are to be done through the systems put in place by DGFT. These activities are independent of the activities of data management or consultancy services that the applicant offers. The applicant can very well supply only the duty credit scrip by buying it and reselling it or only act as a consultant for the transaction by identifying the seller of the scrip and getting it transferred in the name of their client. Data management activities assisting the client in the clearance of goods from customs can also be performed without a supply of duty credit scrip.

The supplies made by the applicant as enumerated in the service order of M/s. Sitaraman Shipping Service is ‘Mixed supply ‘and the rate of tax is the highest rate applicable to the various services supplied by the applicant which is 9% CGST as per Notification No. II/2OI7- C.T.(Rate) dated 28.06.2017 as amended and 9%o SGST vide Notification No. II (2)/CTR/532(d- 14)/2017 vide G.O. (Ms) No.72 dated 29.06.2017 as amended. Therefore, as per Section 8 of the ACT, the rate of tax of this mixed supply which is billed at a single price is the rate of the highest rate of the services supplied which is 18%.