2025(03)LCX0295(AAR)

Amardeep Udyog

decided on 26-03-2025

MAHARASHTRA AUTHORITY FOR ADVANCE RULING
GST Bhavan, Room No.107, 1st floor, B-Wing, Old Building, Mazgaon, Mumbai
 - 400010.
( Constituted under Section 96 of the Maharashtra Goods and Services Tax Act, 2017)

BEFORE THE BENCH OF

(1) Shri. D.P. Gojamgunde, Joint Commissioner of Slate Tax, (Member)

(2) Ms. Priya Jadhav, Joint Commissioner of Central Tax, (Member)

PROCEEDINGS

(Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)

The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively] by M/s. AMARDEEP UDYOG, the applicant, seeking an advance ruling in respect of the following questions.

1. What is the HSN code of the Geometry Compass Box supplied by the Applicant to BMC.

2. What is the GST rate at which the said supply should have been made to the BMC?

That the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.

1. FACTS AND CONTENTIONS - AS PER THE APPLICANT

1.1 M/s. Amardeep Udyog is a partnership firm primarily engaged in trading of goods which includes stationary products, readymade garments etc.

1.2 The Firm had received a purchase order from Brihan Mumbai Municipal Corporation (‘BMC’) on 11th June 2024 for supply of stationery items to students of Education Department of BMC.

1.3 Out of the many items that were proposed to be procured, Geometry Compass Box for Standard 4th to Standard 10th was to be procured. The HSN code mentioned in the Purchase order was 73102910 and the GST rate mentioned in the Purchase Order was 18% (i.e CGST 9% and SGST 9%).

1.4 Further, said Purchase Order contained the Descriptions of Stationery Items. It was mentioned that the Geometry Compass Box should contain 1 compass, 1 divider, 1 scale 15 cms, 1 set square 30°, 1 set square 45°, 1 set square 60°, 1 protractor 180°, 1 eraser, 1 pencil and 1 sharpner (Std 4th to 10th).

1.5 The Firm while supplying the product, classified the product under the HSN code 90172010 and applied GST rate of 18% i.e (CGST 9% and SGST 9%) as per applicable Notification 1/2017-Central Tax Rate dated 28th June 2017 Schedule III Sr No 413.

1.6 However, BMC is of the view that the aforementioned product should be classified under HSN 73102910 and GST rate applicable as per Notification 1/2017-Central Tax Rate dated 28th June 2017 Schedule II Sr No 180.

2. STATEMENT CONTAINING APPLICANT’S INTERPRETATION OF LAW AND/OR FACTS

2.1 As per Sr. No. 413 of schedule III of CGST Act, 2017, following goods are taxable at 9% CGST rate.

2.2 As per Sr. No. 180 of Schedule II of CGST Act, following goods are applicable at 6% CGST rate.

2.3 The applicant would like to refer to the first schedule of customs tariff act 1975 and analyse code 7310 and code 9017.

2.4 As per chapter 73 of the First Schedule of Customs Tariff Act, 1975 Heading 7310 consists of following.

2.5 As per chapter 90 of the First Schedule of Customs Tariff Act, 1975, Heading 9017 consists of following.

2.6 The product supplied by the Applicant is a Mathematical Drawing Instruments which are packaged in a box and the same is printed on the box and packaging. The applicant has attached pictures of the product.

2.7 While placing the order, BMC used the terminology ‘Geometry Compass Box’ which contains specified individual products which have to be curated into 1 set.

2.8 The applicant is of the view that even though ‘Geometry Box’ is classified under HSN 73102910 as per GST rate notification, the product supplied by the applicant is not a Geometry Box and the product supplied by the applicant shall be classified under HSN code 90172010 on which GST rate applicable is 18%

03. CONTENTION - AS PER THE CONCERNED OFFICER:

OFFICER SUBMISSION DATED 16.10.2025:

3.1 M/s Amardeep Udyog is a partnership firm holding GSTIN 27AAXFA4776G1ZU primarily engaged in trading of goods which includes stationary products, readymade garments etc.

3.2 The Firm had received a purchase order from Brihan Mumbai Municipal Corporation (‘BMC’) on 11th June 2024 for supply of stationery items to students of Education Department of BMC.

3.3 Out of the many items that were proposed to be procured, Geometry Compass Box for Standard 4th to Standard 10th was to be procured. The HSN code mentioned in the Purchase order was 73100000.

3.4 Taxpayer received order of geometry compass box. HSN code for this appears to be 73100000. As per the invoice also taxpayer had supplied these geometry compass box to Brihanmumbai Municipal Corporation. Officer’s Standpoint/Interpretation

• It appears that GST rate of 12 % will be applicable on these transactions.
   

• No any proceeding on this issue is pending with this office.

04. HEARING

Preliminary e-hearing in the matter held on 18.12.2024. Mr. Chintan Rambhia, C.A., appeared and requested for admission of the application. Jurisdictional Officer Mr. Vishal C. Chandegave, Deputy Commissioner of CGST is available.

The application was admitted and called for final e-hearing on 13.02.2025. Mr. Mr. Chintan Rambhia, C.A. (Authorized Representative) appeared made oral and written submissions. Jurisdictional Officer Mr. Vishal C. Chandegave, Deputy Commissioner of CGST appeared. We heard both the sides.

05. OBSERVATIONS AND FINDINGS:

5.1 We have gone through the records of the case and the submissions made by the applicant along with the application and the submissions made at the time of personal hearing. It is seen that the applicant has supplied ‘Geometry Compass Box’ containing 1 compass, 1 divider, 1 scale 15 cms, 1 set square 30deg, 1 set square 45 deg., 1 set square 60 deg., 1 protractor 180 deg., 1 eraser, 1 pencil and 1 sharpener to BrihanMumbai Municipal Corporation. The applicant vide this application is seeking the correct classification and rate of tax on the aforementioned supply.

5.2. As the outset, Let’s analyse the HSN 7310. Chapter 73 is applicable to the articles of iron or steel. On perusal of the description of HSN 7310 as reproduced in para 2.4, it is seen that the HSN 7310 is applicable to the goods made up of iron or steel that are in the nature of container or box. Thus, the entry at Sr. No. 180 in respect of ‘Mathematical boxes, geometry boxes and colour boxes’ is only in respect of the container box or the case that is made up of iron or steel. What the applicant is supplying is not just the box but various articles that are put in the box are also supplied along with it. Hence, HSN 7310 is not applicable to the box when supplied alongwith the articles contained in it.

5.3. We find that the applicant is supplying various items as detailed in para 5.1, placing them in a box, which is named as ‘Kores Max-Mathematical Drawing Instruments’. A number of items are kept in the box by the applicant who sells the same as a set by declaring the same as Geometry compass box. In order to examine the proper classification of the aforesaid product, it is essential to first establish whether the goods supplied by the applicant is a composite supply or a mixed supply. As per Section 2 (30) of the CGST Act, 2017, defines Composite Supply as under :-

“composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

Illustration: Where goods are packed and transported with insurance. the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply:”

Section 2 (74) of the CGST Act, defines Mixed Supply as under :-

“mixed supply” means two or more individual supplies of goods or 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.

5.4. In order to constitute a composite supply, the goods provided by the applicant should be naturally bundled in the ordinary course of business. The concept of ‘naturally bundled’ supplies is not defined under CGST Act. For this, reliance can be placed on the flyer cum FAQ issued by CBIC to explain the concepts of ‘composite supply’ and ‘mixed supply’, which also refers to the Education Guide issued under service tax regime in determining whether a supply is a composite or a mixed supply under GST regime. The ‘Education Guide’ issued by the Central Board of Excise & Customs (‘CBEC’) in the year 2012 explains the ‘Bundled service’ to mean a bundle of provision of various services wherein an element of one service is combined with an element or elements of any other service or services. Para 9.2.4, Taxation of Services-An Education Guide reproduced as under:

“Whether services is bundled in the ordinary course of business would depend upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators some of which are listed below:

a) The perception of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package, then such a package could be treated as naturally bundled in the ordinary course of business.

b) Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines.

c) Nature of the services offered is such that one is the main service and the other services combined with such a service are ancillary.

d) Other illustrative indicators, not determinative but indicative of bundling of services in ordinary course of business are -

There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. The elements are normally advertised as a package.

The different elements are not available separately.

The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected.”

5.5. We find that the said concept can also be equally applied for determining whether the goods supplied in a package can be termed as a composite supply or mixed supply. We find that the goods supplied includes a metal box inside which various articles such as compass, divider, scale, protractor, set squares, pencil, eraser and sharpener are supplied. It is seen that the customer i.e. BMC in this case, pays a single amount for the said goods, thereby fulfilling the condition that the customer pays one single price for the entire package. It is also well known in commercial and general parlance by the customer that a Geometry Box will contain certain instruments used for drawing such as Compass, divider, scale, protractor and set square. However, we find that in the instant case, in addition to the aforesaid items, the applicant is also supplying a pencil, an eraser and a sharpener in the said box. Such items are not normally advertised as a ORITY * package. Further, it is common knowledge that the customer can purchase a compass, a divider, a scale, a protractor, set squires, pencil, eraser and sharpener separately and the said items are sold separately in the market by various suppliers. Therefore, the fact that the goods are available separately, mitigates the assumption that the goods supplied by the applicant can be termed as a ‘composite supply’. By applying the aforementioned principles and guidelines to examine whether the goods provided by provided by the applicant can be considered as naturally bundled, in a Geometry Box, we find that such services are not naturally bundled with each other in the ordinary course of business. Each individual items can be purchased separately and the specific combination of goods supplied in the geometry box by the applicant is not a combination which can be termed as naturally bundled and sold in the commercial market. Therefore, this combination cannot be treated as naturally bundled in the ordinary course of business. Since the combination of goods sold by the applicant cannot be treated as a composite supply, we hold that the goods sold by the applicant will be considered to be a mixed supply involving supply of various goods, which can be individually classified as under :-

5.6. We find that Section 8 of the CGST Act, reads as under: -Tax liability on composite and mixed supplies-The tax liability on a composite or a mixed supply shall be determined in the following manner, namely: -

(a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and

(b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.

Accordingly, In this case the highest rate of tax is 18% (9% CGST + 9% SGST) for scale falling under Chapter 90178010 and therefore in terms of Section 8 of the CGST Act, 2017, we hold that the goods supplied by the applicant would be considered as a mixed supply and the same shall be treated as supply of Mathematical Instruments boxes and classified under Chapter Sub Heading 90178010 which attracts the highest rate of tax of 18% (9% CGST + 9% SGST).

06. In view of the extensive deliberations as held hereinabove, we pass an order as follows:

ORDER

(Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)

For reasons as discussed in the body of the order, the questions are answered thus –

Question No. 1. What is the HSN code of the Geometry Compass Box supplied by the Applicant to BMC?

Answer No. 1 The Geometry Compass Box supplied by the applicant to BMC amounts to mixed supply u/s. 2 (74) and is appropriately classifiable under Chapter Sub Heading 90178010, being HSN of the goods that attracts highest rate of tax.

Question No. 2. What is the GST rate at which the said supply should have been made to the BMC?

Answer No. 2. The rate of GST applicable would be 18% (9% CGST + 9% SGST).

Place - Mumbai

Date - 26/03/2025

Copy to:-

 l. The applicant
2. The concerned Central / State officer
3. The Commissioner of State Tax, Maharashtra State, Mumbai
4. The Pr. Chief Commissioner of Central Tax, Churchgate, Mumbai
5. The Joint Commissioner of State Tax, Mahavikas for Website.