Supply made by Cost Centers of Bharat Earth Movers Limited is Composite Supply: AAR [Read Order]

The Karnataka Authority of Advance Ruling (AAR) ruled that the supply made by Cost Centers of Bharat Earth Movers Limited is composite supply.

The applicant, Bharat Earth Movers Limited is a Public Sector Undertaking, engaged in manufacture of a wide range of products to meet the needs of mining, construction, power, irrigation, fertilizer, cement, steel and rail sectors.

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. The Applicant entered into a contract with BMRCL vide Contract.

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.

The applicant has sought advance ruling on the issue 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 coram of Dr. M.P.Ravi Prasad and Mashood Ur Rehman Farooqui held that 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.

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