The Tamil Nadu Authority for Advance Ruling has held that sale of coal’ and coal handling and distribution service are not composite supply and attracts 5% and 18% GST respectively.
The applicant, Devendran Coal International Pvt. Ltd., is engaged in the business of trading of coal in India, procured by them in the domestic market as well as imported from overseas. Further they render coal handling and distribution services.
The applicant come up for ruling in a situation wherein the customer of the applicant first place purchase order for procurement of coal and later intend to provide coal handling and distribution service as well. The first contract is entered for supply of coal and second for rendering coal handling and distribution. The applicant requires the Authority to clarify whether the both contract can be treated as composite supply and pay GST at 5% or need to treat them separately and collect separate applicable GST rate.
The Coram of Sri T.G.Venkatesh, I.R.S. and Smt. K. Latha observed that the whole supply of coal and the Handling and Transportation services are two supplies rendered at different times. They are two individual supplies which are not rendered in conjunction with each other and have to be treated as independent and separate supplies only. Hence further observed by the Authority that the Supply of coal is liable for 5% GST and the supply of service handling and distribution is liable for 18% GST.
The Authority ruled that “‘sale of coal’ by the applicant and subsequent supply of coal handling and distribution service ordered by a customer separately is not a composite supply. Applicant is liable to discharge GST on Coal Handling and distribution charges collected at the applicable rates for such independent supply”.
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