Dismissed

GUJ/GAAAR/APPEAL/2025/05dt. 22.01.2025 of M/s. Doms Industries Pvt. Ltd.

GST AAAR22 Jan 2025GUJ/GAAAR/APPEAL/2025/05dt. 22.01.2025

Case brief

AI extract

What is this about?

An appeal against an Advance Ruling regarding the classification of a stationery kit under GST. The court upheld the ruling that the supply is a mixed supply and directed the use of the HSN code attracting the highest tax rate among the components.

What did the court decide?

No relief granted; appeal rejected and Advance Ruling affirmed; rule High HSN code for tax calculation.

GUJ/GAAAR/APPEAL/2025/05dt. 22.01.2025 of M/s. Doms… — GST and Indirect Tax | GST AAAR (2025)

¶1

¶2

()Li.IAI{'I' AI'I'E,LLA'I'E AU'IIIORI'I'Y }'OR ADVANCI'l Ittilll{(} (;OOI)S ANI) SERVICES't'AX '"jMMaRKrt.glfl'o* I)/5, IIA.IYA KAI{ I}IIAVAN,^{ASIIRAMITOAI)'} AIINIEI)AI}AI) - 3IIO OO9.

¶3

AI)VANCIl RIILIN(i^(APl'liAL) NO.^{GIIJ/GAAAI{/AI'}l'}lrALl2025l05}

¶4

(IN Al'l'}LI CA' I'lON NO. Advancc l{r-rling/S GS'l'&C(iS'l'^{I 2023 I AfV03} )

¶5

I)atc 201 .2025

¶6

Namc and addrcss of the M/s. DOMS Industrics^{P Ll"d.,} appc llant Plot No. 117 , 52llcctor Iixpansion Arca,^{Ncw GII)C,} [Jmbcrgaon, Valsad'39617^I Gu aral GS't'lN oI thc llant 24LAACW6734Al7.P Ccntcr Cornmissioncratc --^Surert t)ivisitln - XII- [Jrnbcrgaon Itarrgc - V Aclvancc Ituling No. and GIIJ/GAAI{/R /20221 52 clatccl^{3 0. I 2.2022} [)atc [)atc ol'appcal 2n.01 .2023 [)atc clf- ]'crsonal I Icaring 8. 1 1 .2024 I)r'cscnt lirr tlrc appellant .Shri Itahurl Shah, Atrthorircd signatory, Shri Santosh Sonar and Shri l(cshar Soni.

¶7

At thc outsct wc woulcl likc to makc it clcar^{that thc provisionsol'thc} Ccntral Goocls and Scrviccs^'l'ax Act,^{2017 and Guj arat Goodsancl Scn'iccs 'l'ax} Ac1, 20it7 (hcrcinaftcr rclcrrcd to as thc'CGS'I'Act,^{2017'ancl thc'G(iS'l'AcL,} 2017 ') arc pari materia and havc thc samc^{provisions in lil<c ntattcrand dil'1cr liorli} cach othcr only on a fbw spccific provisions.'l'hcrclbrc,^{utnIcss a trcntirin is} par^ticularly madc to such dissimilar provisions, a rclcrcncc to thc CCS'I'^Act,2Oll wourld also mcAn rcfcrcncc to thc corrcsponding similar^{provisionsin thc GGS'l'} Act, 2017 .

¶8

'l'hc prcscnt appcal is filcd undcr Scction 100 o['thc CGS'I'Act, 2017 ancl thc GGS'I'Act,^?017 by M/s. DOMS Industrics^{P Ltcl., (hcrcinalicrrcfcrrcclto it:;} z\ppcllant) against thc Aclvancc Ituling No. GtJ.l/GAAIf/R^{12022152datc:cl} 30. I 2 2022.

¶9

-) t]ricl'ly, thc lhcts arc cnurncratcd bclow lbr casc of'rcf-crcncc:

¶10

C thc appcllant is a ntanulacturcr & supplicr o1'statit)ltcry itcrns:

¶11

a thc applicant supplics thc goods in a cotnbination^with othcr^protluctsviz la I^{DOMS A1 pencil.} 'l'his consist ol' 10 pcncil alotrg n,ith a shat'llctrcr & cl'ascr. lbl^{DOMS Smart Kit} .^'l'his is it gili paol< rvhich coltsists ol'a coltturiirg bool<. tvrro pzrcl< of pcncils. onc pack o1- colour pcncil. ot-lc 1"racl< oi'ttil [)aqc I ol'()

¶12

)

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pastcls, onc pack ot- plerstic crayolts.^{ollc pack ol'wax orayons. onc crascr.} onc scalc ancl onc sharpcncr.

¶15

lcl^{DOMS my first pcncil kit. lt consists ol' a pcncil, crascr, scalc anda} sharpcncr.

¶16

a 'l'lrat conscclucnt to thc 47't'mcoting ol'thc (]S't'C<luncil, vidc notification No. 612022-C'l'(l{), GS'l'ratc was incrcascd^{on pcncil sharpcncr,Scalcs &} mathcrnatical instrutncnts scts llotn^{l2oh to i [196;}

¶17

c thc applicant lccls l"hat hc satis[-rcs thc^{lbr-rrcot"lditionsto tcrm thc albrcsaicl supply} zrs' compositc supply'.

¶18

In vicw of thc forcgoing facts, thc^{appcllernthad sought AdvanccI{uling}

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on thc lollowing qucsti<tns, viz:

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(i) Ll/hether the supply r{ pencils sharpener ulong w,ith penc:ils being principal^supply will be considered as the contposite supply or^{rnixed supply?}

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(ii) Whctt will be the IISIV code lo he r.L,sed by us in tlrc above case.

¶22

(iii) LVhether sttpply q/'shcrrT)ener uiisnyl r,vith the kit lictving a nomirtctl^{value will lruve} trn intytctt:l on role qf'lcrx. {/'1te.s,^ti,hr.tl will^{b,'t 1l';t:rctle o,/'1rt-r (k IISIVcode to be usecl} b.Y'use'

¶23

C<tnscclucnt to hcaring: th,; applicant.,^{rhc tir-rjarat ,,\uthorityfor Aclvanc,c}

¶24

I(uling IGAAI{l, rccorclccl thc lbllou'ing findirtgs^viz

¶25

. thc applicant has on his own stertc:d ttrat slrau:pcncr &, orascr arc includcd^as acccssorics. that an aoccssor-/ is ntll csscntial^{[o []rc proch-rct;}

¶26

. thc clictionary rncaning ol acccssory suggc:sL lhat thc poncil sharpcncr &"^crzlsor suppiicd with thc pack is noL an^{intcgral part oi'thc pcncil but it is usclul lbr thc} pcncil;

¶27

. pcncil sharpcncr & crascr arc ntlt naturally bundlcd & ali thcsc products cannot^bc considcrccJ as mzrclc in conjunction^{with cach ol.hcrin orclinary coursco1'busincss;}

¶28

. thc arguLncnt that in t-hc inch-tstrv all thc goor]s tirc sold togcthcr is not tcnablc;

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. that ['cr,r, in thc inclLrstry zrckrpt sircir nutrl.cting o[-supplyirtg hc goocls togcthcr:

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. that thc proclucts elrc suppliccl indcpcndcntly also:

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. that thc goods arc no[ naturall)' truncllcd;

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. lhat it is vcry clilficult to dctcrminc thc principal supply;

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that it lulfils all thc conditions of ;r mixcd strpply;

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that rccoursc to GI{l is not propor sincc r.,vhat is bcing clccidccl is naturc o[^supply ancl not classilication ol thc product.

¶35

(). 'l'hc GAAI{, thcrcaflcr, viclc thc impugnccl ruling datccl 1U.10.2021, hcld

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as lbllows:

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(i) thc supply ol'pcncils sharpcncr iilong n'itlt^pcnc'ils is covcrcd^{undcr thc catcgorv} o I'^'mixcd supply' ;

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(ii) as cliscussccl in para 21 .1 tll-thc ilnpugnt:d^rrrling,.

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(iii)1cs thc sr-rpply ol'sharpcnu"iilung rvith^{thr: kit ltaviltga norninal valuc rvill ilar,'c} zur impact orr ratc: o[' tax. ,,\s^{cliscr-rsscciin} llara^{21 .2 ancl 21 .3 o1'thc irnpugnccl} ruling.

¶40

Aggricvcd by thc albrcsaid^{advancc ruling, thc appcllantis bclorcus,}

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l'}agc 2 of'9

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. that thc llSN codc sorvcs^{as a yarclstick tbr clctcnniningthc classificationol- thc} procluct whcthcr^{sold ildividyallyor in scts:}

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that thc r-ncchanism of classillczrtion^{o['thc goclclsalttngrvitl-rthc (lll{ as stipulatcd} unclcr Custtltns^{Latv woulcl apply undcr (]S'l' as wcll;}

¶45

. that whorc goods arc classillablc^{undcr two or lnorc hcacling. classillcationncccls} to bc undcrtakcn^{bascd on I{ulc 3 of (llR;}

¶46

that in oasc^g1' salc o['^{'oompositc g<lodsctlnsistingol'clill-crcnt} ruratcrials/cornpgncnts^{ancl goods put up in scts ltrr rctail salc. I{r-rlca(b) ol'(ill{ is} to bc applicd;

¶47

. cxplanatory notcs ck:llnc thc^{tcrm'gooclsput up in scts lbr rctail salo';} . furthcr lbr dctcrrnination ol'^{thc goocls which prclviclcscsscntial charactcristic'} rcl-crcncc can^{bc maclc to thc cxplanatory notcs issucd by WCO;}

¶48

. that sincc all thc conclitions^{as spccificdin r:xplanatorynotcstor thc tcrtl'gtltlcls} put up in scts lbr^{rctail salc' is satishccl&" sinoc pcnoil providcs thc csscntial} charactcristic.^{thc llSN coclc to bc uscd lbr IX)MS nlpcncil shoulcl l"rc thc clnc} applicablc,

¶49

applicablc,

¶50

r 6S'l'Crlr-rncil irr its 4Jtt'rnccting^{rccolrlt-rcnclccl chattgc ir-r (iS'l'ratcviclc} notiljcation N().^{612022-c'l(lr) rvhcrcinthc (is'l' ratc \ras incrcasccl orl pcncii} sharpcncr & Scalcs^{& n"rathcrnatical instrumcntsscts litlt'n 1)"1, to I ll(%.}

¶51

. thc appcllant rclics^gp thc mling^{passccl undcr LJS Custtltt"ts [,ilw ol1 classillczrtion} ol' statit)llcry sc1^{cclnsistin*q ol' two rcgular pcncils,}

¶52

. thaI suppl],of pcncils with sharpcncr^{and crascr is a crltlpositcsupply & nrcctsall} thc condititlns;

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. that rna.f or manulacturcrs arc^{tbllowing this tradc practicc sincc clccadcs,}

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. that pcrccption of thc customcr^{is also a dctcrtninilntIzrctory;}

¶55

. that morc rnarl<ctzrbility ol-^{goods/scrviccs inclcpcnclcntly oannot bc a dccisivc} lerctory uot to^{qr-ralilyas coll'lpositc supply;}

¶56

. that onc ot'thc imporlant erspcct^{ol-principal supplv is that thc othcr supplYshrlulcl} bc arrcillary to thc^{principai supply: that thc tcrn-t arrcillan'isttot clcllncdundct'} C(iS'l' Act: that^{thcy woulcllikc trl rcly on thc casc <l[' Varcccl.lacol'r l: r'r'hcrcin}

¶57

plcelpipg assigrrccl tcl u,clrcl'ancillary in thc lau'lcxictltr^{as bccn etcccptccl-}

¶58

that thc cor-rccpt <ll'princil'ral supply^{is sirrrilarto I{ulc 3(1,) ol'(illl. u'hich;lrclviclcs} lor csscntial charactcr:^{that 1hc principlcs laid (lor,t'lt ltlr clctcrnrining gtltlcls} pr6vicling csscntial^{charnctcr to a sct can alsclbc cxl,clrclccl dctcrtllirrc thc llrincipal} supply.

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f)crsonal hcaring in^{thc mattcr was hcld on 8.1 I .2024 whcrcin Shri Itahul} Shah, authorizcd^{signatory,Shri Santosh Sonar and Shri l(csharSoni, appcarcdand} rcitcratccl the submissions^{maclc in thc appcal.I)uring thc collrsc o l' pcrsonal} hcaring a compilation^{containingcopy of thc appcal papcrs alrcady fllcd, along} rvith copics of't[c I'ollou'ing^{was submittccl}

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la l^{Copy ol' thc rulingpasscdundcr tJS Custorris lOross rlrling N245'167clatccl} I 0.e.2013 l:

¶61

lbIpholocopy^{ol'irnagcs o1'sirnilzrr productsolcl [rv tnttittr inclltsl;1' Playcr:} lcl^{GS'['ratcchetngcs ol'pcncilsharpcncr} ldlphotocopy^{ol-thc ans\/cl'ol'thcIIon'blcthc Ministcr ol'Statc ltlr liinancc in thc} Raiya Sabha to^{unstarrccl qucstion No. 1043 derLccl12.12.2023.alongrvith} anncxurc:

'AIl{^{r9tj4sc 7441}

[)agc J ol'()

I^c I^{rulingo1' (lAAIt in 1hc cersc ol Ilarocla McclicarcP l,ld 2. Sarnccra 'l'racling} C<lmpany', Snuth lndian licdcration of |ishcrmcn Socictics'', .luinish Anantkurnerr I'atcl-5. III'} IncJia Salcs [' Ltd6.

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IiINI)IN(;S

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9 . Wc havc carclLlly gonc through and considcrcd thc appcal papcrs, writtcn submissions lilcd by thc appcllant, subrnissions madc aL thc tirnc of' pcrsonal hcaring, thc Advancc l{uling givcn by thc GAAI{ and other materials availablc on rccord.

¶68

'I'o summarir,c, thc GAAIT vidc its impugncd ruling hcld that supply o[' sharpcncr along with pcncil, is a mixcd supply; that in casc o1- nrixcd supply, con-rprising two or morc supplics, shall bc trcatcd as supply of that parlicular sr-rpply attracting highcr ral-c o1' lax; thal supply of sharpcncr [along with kitl having norninal valLlc, will havc an irnpact on ratc ol'Lax.

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il. On soinq lhrough thc srcurnds &^pra r o['tl-rc a llan it is lbrthcornin that thc a DD cl lant is aggr icvcd onl V rn res ncct of' thcir nroduct 'I)OMS A I NC ncil' which consists ol' 10 cs ol' cncil onc crascr and onc sh cncr. Wc thcrcftrrc lirrit our ruling to thc saiel^product onlv.

¶70

'l'hc avcrmcnt raiscd by thc appcllant is that lbr detcrmination of thc goocls which providcs csscntial charactcristic, rcfcrcncc can bc madc to thc cxplanatory notcs issurccl by WCO; that as pcncil providcs thc csscntial charactcristic, thc I ISN coclc to bc uscd for I)OMS Al pcncil should bc thc one applicablc; that supply of pcncils with sharpcncr and crascr is a compositc supply & mccts all thc conditions.

¶71

'l'his avcrmcnt stands answcrcd by thc GAAI{ in para 19. Wc find that thc GAAI{ has cxarnincd it by tcsting it with thc lour conditions which nccd to bc satisllccl lbr a supply to lall within thc ambit of^'compositc supply'. GAAIT^has hcld that supply ol' l0 pcncils, onc crascr and onc sharpcncr^{in a} singlc^{box, namcd} I)OMS n 1, is not'naturally br-rncllcd', that thcy arc not^madc in^{conjunction with}

¶72

' 2.021 (55) (lS I'1.495 (nn I{-(iS'l'-Or-ri)

¶73

'^{20r 9 (:l r} )^{(is't't, 375(nnI(-oS't'-()Lri)} '^{202r (52) (;s't't .466(AAI{-(;S't'-t(cr)} t 2022 (59) (is't't. I I I (nn R-GS't'-(iu-i) o 20te (29) (]s't't ,7s6 (LAI{-GS'I')

¶74

[)agc 4 <11- 9

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caoh othcr in^{ordinary coursc of busincss &" that nonc ol'thcsupplyis} principal/prcdominant^{supply. wcfind that in thc additional subnrissior-rs} submittccl on^{B.l I .2024, cluring the coursc of pcrsonall-rcaring,or pagc 82, an} cxtract {or^{guidanceas pcr scrvicc tax eclucationguidcissucd by CI}lC is placcd,} whcrcin undcr^{para g.2.4, thc manncr of clctcnnining il- thc scrviccs arc buncllccl irr} thc orclinary^{courscol'busillcss,is placcd, viz}

¶77

l. Guidsncq aqpsrSoruice lot^{Edtc.iloESlESJ!3! j@}

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9.2.4 f,lsnnor ot deternrloing if thR 6arvicos^{arebundledintho ordlnary cour56of business} vlhell€r servrces are hundlec rn the ordnary cour'ge ol^{buslftess would depend upod the tlorrnai or frequet'} pr{rctrces follsfys6 3n lne a/ea cl huSrness 16 r.rh{h 9afvtces^{relate'such norma} and freque0t prac!ir,:es} sdopled rn a business can be ascenarred h()rn^geeeral ind€.9lors^{some ofwhicharellsted belcm*} . The percaptron o{ lre consum8r or the seruce recerrrGr lf large numbar^{ot s€rvlcerecervers} of such bundle o{ sE.vicea re"sonabty exp€ct sucir Eerv}ses to be provided 8s a package then $uch a package could be treated as nat.Jrally bund!€d in the ordinary course of buSlneSS.

¶79

' Maiorit/ of servrco p{oviders rn a parlrc}lar erea of business prgvide simi:aI bundte o! servrces For eremple bundle of cateflic on board and transporl by atr ls a bundle offered by a majority of arrlrnes

¶80

. Tlre nature ol lhe vsrrous services in a ttundlE cf servces will algo help irr detarrnrning whether tha services are bunoled In the ordnary course of busness lf the nature of servrcos is such that clne oF the Serv,ces rs the c:arn sprvcrr and the other sBn.-rces cornbinecl with such servlce are !n !he o€tute ol ificldeqtal or anci:lar! servicBs wh,ch hslp in betler eBjoyment of a maln service. For r:xarnple seruice of stay in a holel is often corf,bined wrtn a serv€e or laundering ol 3.4 items ol clothillg lree of cost per dry Such sewice is af, anollery se.utaB to the provlsio.n of holel acconmodatiOn arrd lhe rssultanl psakEge.would be ?realorj as servirei rdl:rrBlty bundled !n lhe ordinary course Ot busnesS

¶81

' :r:::1"::I:l.ue incrrcarors For der.rn-'rrar,!e rlur rnr,,cal,v€ of t)undring sf services in orrrinary 66ur-os ' J::::j,il':;:'":,J t'star'rr;;3;5 r:'1e sarte imour,r, re iraue( il,)rv orurh ,3r rire.p;rcrasr: ; The otemenls aro nc acvrtriiEd as a paax.age . rhe diflerent ",_ua'""t nt" sc'l avarlacrle separalely' z The difr-er&fl'e,"*"n"u tbe supp.ry wou,c be ls are rntegral to one overall supply * if one or rrore is rernoved. the nature,:f

¶82

No straighl Jacket formu€ c. an be iard dmvn lo dete,,ntine son,e oidrr,ary coursc ot busirress or wh ,"h are a,,t,ned i;J "'"^{;'; ffiil.:il} "#;ff: ;ilil; ], *1::,iJ:

¶83

As is cviclcnt, thor-rgh^{issucd in rcspcct ol'scn,iccs, thc analngy ol'thc} woi-cl naturally buncllccl^{can bc acloptcdcvcn in rcspcct of goods. 'l'hc supply in} prcscnt casc, is not^{naturallybundlcdas many of thc indicatorsas rlcntioncdsuprct} arc not satisllcd.^{Iiurthcr, nothing is proch-rcccl to substatrtiatc thc lact that pcncil} pr-ovidcs thc csscntial^{charactcristic,as lar as supply ol' pr"rldurct t)OMS n f . is} conccrnccl.⁽ⁱⁿ AII^{has f urrthcr cxamincclwhcthcr tlrc procltict I)OMSA 1, t"t"tccts tl-rc} condition to {al1 unclcr t[c^{ambit of rnixcd supply. CorrscclLrcrttly,vidc tl-rc rurling it} was hclcl that thc^{procluct mocts with thc conditions of tnixcd supplyand that thc} applicant is rccluircd to^{usc thc I ISN codc of thc produrctwhicl"r attractsthc highcst} ratc of tax among all^{thc taxablc supplics containingin a pack/box, in tcrrns oi'} scction 8, ihid. Wc,,^{concur with thc said findings o[thc GAAI{.}

¶84

'l'hc appcllant's ncxt avcr.mcnt is that thc I ISN coclc is a yafdsticl< lbr dctcnnining thc classitlcation^{ol' thc product whcthcrsolcl individuallyor in sr;lsi} that thc mcchanism^{olclassillcationof'tl.rc goodsalong with thc Glltas stipulalcri} undcr Custorns law^{applics undcr GS'l'also;thal whcrc goods arc classifiablc ttntlcr}

l)age ..\

.-i:_::--

two or rrorc hcading, classilication ncccls to bc undcrtakcn bascd on Itulc 3 of GII{; that in casc of'salc o1'cornpositc goods consisting ot'dif'fbrcnt matcrials/componcnts and gooc'ls put up in scts lbr rctail salc, I{ulc a(b) of GII{ is to bc applicd; that tl"rc cxplanatory notcs dcljnc thc tcrrn 'gclods put up in scts lor rctail salc'.

¶89

'l'hc rclcvant cxtracts of Gcncral Itulcs lbr Intcrprctation lcltll o1' thc I ISN, is as undcr

¶90

When by application o.f'llule 2 (b) or Jbr anl,other reoson, goods are, prima /Ltcie, c'lu.s'sifiul"tlc unclar ltro or morc hauding,y, clu.s'.si./ic'ulion.;hull be e//ectecl u.t.fbllott,s;

¶91

(tr)^'l'he heuclin,q v'hic'h ;trovitle.s' the' mosl .s'pec'ific' cle.;criplion shall be trtre.fbrred to haucling.s'ltrovicling u more generul clescription. !lou,evet', v,hen lv,o rtr more heuc{ing,s' euc'h re.fer to purt onllt o/ the materials or,vub,s'lunces conlainecl in mixed or conlpos'ila goocls or lo parl only o./'the ilems in tr set put Ltp.fbr retail sale, tho.se headings ure 1o l'te regurclecl ct.s ccluully spec'i/ic' in relcttion to llns'e gooc{s, even if one o.f'them gives' o more complete or prec'ise cle.ycritrttion o/ the good.s.

¶92

b) Mixtltres', contpo,site good.s consisling Q,/ di//brent maleriul,\ or made up q/ di//brent contponents, ancl goocls put ttp in sets /br relail ,vale, v,hich cannot be classifiecl b1; re.f'crence lo 3 (a), .thall be clus.tt/iecl us i/'they consistecl o./ the materiul or componant yvhich gittes thent lheir es'sentiul clturacler, inso.fir o.t this criterion is applicuble.

¶93

(c) tVhen goods cannot be cla,;,si/iecl by re.fbrence to 3 (a) or 3 (b), they ,shall be cla,ssiliecl uncler the heuding which occur,s' lu,st in numerical orcler among tho,s'e which equally merit crtn.s'iclcrctI ion.

¶94

17 . Wc notc lhat in paragraph 21 .2, GAAI{, has addrcsscd thc afbrcrncntioncd contcntion.^'l'hc rclcvant cxtract ol' thc CGSl' Act, 2017, which govcrns thc naturc ol'thc such supply, statcs as undcr:

¶95

Sectio n 2. DeJinitions.-

¶96

In lhis Act, unless the context otherwise req'Ltires,-

¶97

(30) "contp{tsite supply" means a supply made by a tctxable person lo ct recipienl consisting of'two ot' tl,totle taxable supplies ctf'gctods or services or both, or ony combincttion thereof,' which are nalurally bundled crnd supplied in conjunclion t,vilh eac'h ctlher in the orclincrry course qf'business, one q/ wfuirP is a Strinci;sal supply,

¶98

lllttstrcrlion.- Where gctocls are pockecl ond lrcrnspctrled with insurance, the ,stt1ttrtl1t q/'goocls, Stctc:king malerials, lransStort crnd insurance is^cr cot't'tposite supply ancl supply o/'good,s is a principcrl supply:

¶99

(7 4) "mixed s upply" tmeans lytto or nlore individual supplies o/ goods or services, or ony contbinatictn therectf, mctcle in cctnjunctictn with^{each ctther by} a tctxable Stersctn /br a single price where such supply^{does nol constitutecr} cot't'tpos ite supply.

¶100

Illustration.- A supply c2/ a package consisting o/'cannedfbctds,^stveels, chctcolcttes, cakes, drlt fiuits, aerated drinks^and /iuit^{juices when} supplied /br a single price is a mixed supply. Each^{cf'these itencsccrn} be strpptied separalely ctnd is not c{ependenl^{on any other. Il shall nol} be a ntixecJ sttpply if'these ilems ure supplierl^{separcttely,'}

¶101

' Pagc 6 of'9

¶102

¶103

Section 8.^{Tax liabitity on composite snd mixedsupplies'-}

¶104

The tax liabitity^{on a composite ctr a ntixec)supply shallbe delerminedin lhe} .fbltrming^{manner, namelY : -}

¶105

(a) a composite sutpply^{concprising lwo or more supplic,s, one of which is} cr principirt ,r,.rp11,,^{shall be lrecttecl as a sttpply qf'sttchprincipul supply;} and

¶106

(b) cr mixecl ntppll,cctrnprising^{lwo or n'tore sutltstliesshall be trecttec{ ctsct} supply cl'that particular^{supply which attruclsthe highest rate of tcrx'}

¶107

Wc find rhat thc^{CGS'I' Act, defincs a compositc/rnixcdsupply. Additionally,} CGS'I'Act,^{ZOl7, thcrcaftcr, spccifics thc tax liabilityin sucl-r casc whcrcin a supply} Ialls within the^{ambitof eithcra compositc/mixcdsupply. Wc havc alrcady l-rclcl} thattheproduct.I)OMSA1pcnci1,,isa@,tlrcprodtrctnotbcing ,aturally bundlcd,^{not havinga principal supply and not supplicdin conjunction} with cach otl-rcr in^{thc orclinary coursc of busincss.Now, ltlr thc sal<c of'argutncnt,} cvcn il'wc wcrc^{to cxarlinc tl-rc clairn of thc appcllant, wc llnd that thc proclurcttll'} thc applicant, in^{clucstior-r, woulcl not fall cithcr within Itr-rlc 3(a) or 3(b) ol'thc (lllt,} lcavir-rg us with^{thc orrly altcrnativcof rcsorting to ltulc 3(c). 'l'hc clucstion thcn} rvl"rich woulcl arisc is^{whctherltulc 3(c) of thc GI{l or Scction tt(b), ol thc CGS'I'} Act, Z0lT,would^{prcvail. It is a tritc law that whcn thc scction is unarnbiguous, thc} avcrmcnt of thc^{appcllantto takc thc assistancc GI{I for dcciding thc naturc o[} suoply, classification^{ancl ratc ol'tax, is not lcgally tc'nablc.Wc thcrcforc, rcjcct this} submission ol' thc^aPPCllant.

¶108

r8. Lastly, thc applicant^{has rcliccl upoll} VAI'IOLIS rulings, lbrcign^anci

¶109

othcrs

¶110

la I^{IJS Ctrsrornsrulirg lCross rulingN245467 clalcd 10.9 .2013 I l lavinggonc throughthc} taril-l' classillcatior11uli,-,g.^{wc lirrcl that it is lbr a sarnplcidcntillcd as l)isncyltulcr} Stationcry sct, consisting^{o['twrl rcgular pcncils. onc orascr, ollc pcncil sharpcncr & onc} rulcr.^'t'hc l{uling clasiifics^{thc procluct unclor 9609100000 b1' rclying on GI{l 3(b)"} holcling thc pcncil to^{bc provicling ar1 cssontial charactcrto thc product. IIowcvcr.whal} ncccls to bc undc:rstgocl^{is {trr mal<inga juclgcrncntapplioablc:.thc Iactsilrc to bc sirnilar.} Arr1, distinction.^{w<lulclrcnclcrlhc rcliancc, untcnablc'inlau'. Wc alrc not awarc as ttl} rvhcthcr thc dclllition ol'conrpositc"^{r"nixcclsupply arc thc sztlt-lc. lir-rrthcr. thcrc is nrlthing} prulclucccl on rccord. to^{substtrntiatc. that thcrc is a scctirln in thc I.JS custtltns- sitnilar ttl} Sccri.n 3^gl'thc C(iS'l'^{Act. 2011. In vicw ol'tl-rc lorcgoinq.\vc l.incl that thc rclianccis} no[ I cgal lr,' tc:netb lc.

¶111

lbl^{ltulings in thc casc ol'IlarodaMcclicarcI' Ltcl} 7. Sitrttcct'it l'ritclinq Ctllnpr,n.'*.^Stltrtlt Indian licdcration ol'^{l;ishcrlnL)nStlcicticr"..lainish An} antl<unrar l)tttcll') and^{III'} lntlia Salcs} [' i,tdl^l.

¶112

'^{2t)2 r (55) (is t'1. ,195(nn R-(iS l'-()Lri)}

¶113

l)11"g⁷ i,{'{}

¶114

¶115

Wc havc gonc througl"r thc lacts o1- thc albrcmcntioncd rulings.'l'hc scrviccs/goods involvccl. no1 bcing similar. thc rcliancc on thc sarnc is not lcgally tcnablc.

¶116

Wc havc in thc carlicr paragraphs statcd that wc concur with thc findings and thc ruling o1'thc GAAIT vidc thc impugncd ruling. I lowcvcr, with thc changc in thc ratc, wc wish to answcr thc qucstions poscd lor advancc ruling as undcr taking into considcration the changc in thc ratc ol'GS'l':

¶117

Queslion^{l:Whether the snpplyq/ pencils sharpener crlong wilh pencils being principal} supply will be considerecl as the contposite supply or mixed supply?

¶118

lluling^'l'hc supply ol'pcncils sharpcncr along with pcncils undcr product DOMS A I is covcrccl undcr lhc czrtcgory o1-'rnixcc'l supply'.

¶119

Queslion^{2: What vvill be lhe IIS|Vcoclelo be asedb-v-us in the crhove c(tse}

¶120

lluling; ln consononce^y,ilh ruling lo question l, ,since it is a mixed supply, the IIS/V code o/ the .s'tr1tpl.y, v,hich allracl,s' lhe higher rale qf tux an'tong all the luxable supltlie,s containecl in proclucl IX)MS Al, is rccluircd to bc uscd.^'l'hc prcscnt^(iS'I'ratc is as undcr

¶121

I i'". Proclucl IT\IV GS7' GST' notificat ion
Iwo crtde rule
Pencil Sharpener 82t1 12% Sr. lrlo. l86A of Scheclule U o/
l1 notificct/ion l',/o. 1/201 7-L'7'
(llute), cts omen(lecl. I e./fbctive
1.3.20231 il
) l' e n c' i l.; ( i rtcl ucl in g 9608/ t2% Sr. |t'to. 233 o/ Scheclule II d
proltelling or sliding 9609 notificcttion lt/o. I /2() 17-C7'
pencils), crayons, (llute), crs crm endecl.
ltcrs I c l,s, d rut,r, irt g
c' hurcoct l,v <V I o i I or:;
chul k
i, Iirusers 1016 5% Sr. lVo. l9l d Scheclule I oJ'
notificcrt ion l,'to. I /20 I 7-C7'
I e), as ctmended.

¶122

chunS;es in the rute o./ GS7- in respect o.f'pencil shurpener

¶123

llSlVcocle	I'roduct	(iS7'rate
		Upto17.7.2022	lirom17.7.2022 to	l;ront1.-1.2023
			28.2.2023
82tJ	l'cnciLs/tcrt'1tcner	I2%,	18%	t2%

¶124

Qr.testion^{3; Whethet'sr.tpplyr{'sharpeneralongwith the kit having a nontinctlvalue will} have an intpact on rate r{'tcrx. I/'yes, whal will be lhe rale o/'tax &^{IISIV code to be usecl} b.lt tLse.

¶125

ttttling ; I'e,s, the .s'up2tly s'ttltply o.f the sharpener along with^{the kit hat,ing a nominal value v,ill} hcrt,e un imtrtctct on rate o.f'tctx. T'he rute q/ tax will be^{12% and the /LlW code, in respectof'mixed}

¶126

20 r9 (3 r) (;s't't. 37s (nAR-(iS't'-(iuj)

¶127

" 202r^(-s2) cs'r'r .466^{(LAI{-(;s't'-t(cr)}

¶128

tu 2022 (-59) (is't't. ll I (An R-(iS'l'-()Lr1)

¶129

' '^{20 I L) (29) (is'l't , 7 56 (AAI{-(;s'l')}

I'agc tl of 9

,\upplv f ie- procluct l)OL\45 tlt I u,ill he lhe,sttpplyvrthic:h ollt'crt:ls^{lhc higher rctle o.f tctxctntongall} rhe threc .s'r.rpplies' ie 82 l1 or 9608 or 9609.

¶134

In vicw of thc abovc findings, wc rcjcct thc appcal tllcd by^{appcllant M/s} M/s. DOMS Industrics P Ltd., against Advancc Ituling No. GtJJ/(iAAIt/ll/2022152 datcd 3 0. I 2.2022 of thc Guj arat Authority lor Advancc^{I{u ling.}

¶135

¶136

w ( ltajcev Topno ) Membcr (S(;ST)

¶137

Placc: Ahrncdabad
il ai,:i1
[)atc:Z 01.2025 7t
,ii.i
i. ;:) -sj i.t

¶138

0]^{V Siva Naga Kumari)} Member (C(;ST)

¶139

[)ae.c 1) ol'9

GUJ/GAAAR/APPEAL/2025/05dt. 22.01.2025 of M/s. Doms Industries Pvt. Ltd.

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GUJ/GAAAR/APPEAL/2025/05dt. 22.01.2025 of M/s. Doms Industries Pvt. Ltd.

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