The Karnataka Authority of Advance Ruling (AAR) ruled that the Supply of power packs, freight & insurance charges would form a part of the value of supply of power packs. The supply of commissioning or installation services supplied by the applicant are independent services and are not covered undersupply of power packs.
The applicant, M/s San Engineering & Locomotive Company Ltd. is engaged in the manufacturing of power packs classifiable under HSN Code, Chapter 86, and also in activities of commissioning or installation services of power packs.
The applicant received an order from M/s Integral Coach Factory to supply twin power packs with the underslung engine and hydraulic transmission and commission and installation of the same high-speed self-propelled accident relief train.
The applicant sought the advance ruling on the issue that Whether the supply of power packs, freight and insurance service, and commissioning/ installation services as per the Purchase Order has to be treated as “Composite Supply” as defined in section 2(30) of CGST Act, 2017 read with section 8(a) of CGST Act, 2017 or freight and insurance service and commissioning or Installation can be treated independently of the supply of power packs given that installation and commissioning takes place after 4-5 months of supply of power packs.
The authority consisting of members Dr. M.P. Ravi Prasad and Mashood Ur Rehman Farooqui ruled that the Supply of power packs, freight & insurance charges would form a part of the value of supply of power packs. The supply of commissioning or installation services supplied by the applicant are independent services and are not covered under the supply of power packs.
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