The Appellate Authority for Advance Ruling (AAAR), West Bengal has held that the supply of UPS and Battery is to be considered as Mixed Supply within the meaning of Section 2(74) of the GST Act, as they are supplied under a single contract at a combined single price.
The Applicant, a supplier of power solutions, including UPS, servo stabiliser, batteries etc. sought for a ruling that whether the supply of UPS along with the battery can be treated as Composite Supply within the meaning of Section 2(30) of the CGST/WBGST Act, 2017.
The authority noted that the UPS serves no purpose if the battery is not supplied or removed. It cannot function as a UPS unless the battery is attached. However, what needs to be considered is whether or not these two items are “naturally bundled”.
“When a UPS is supplied with built-in batteries so that supply of the battery is inseparable from supply of the UPS, it should be treated as a composite supply and as a composite machine in terms of Note 3. The UPS being the principal supply, the relevant tariff head for the composite supply will be 8504 under serial no. 375 of Schedule III in terms of Notification No. 01/2017-Central Tax (Rate) dated 28/06/2017 (1125-FT dated 28/06/2017 of the State tax),” the authority observed.
The authority further noted that if a combination of goods that does not amount to a composite supply is being offered at a single price, such supplies are to be treated as mixed supplies.
As per section 2(74) of the GST Act, Mixed Supply means “two or more individual supplies of goods/services or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply”.
According to the Applicant and the Purchase Order supplied by them as Sample of the Billing done by them, the Tribunal found that though UPS and Battery are two different and independent items, they are billed together and a single piece is quoted for the sale.
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