The Gujarat Appellate Authority of Advance Ruling (AAAR) while rejecting the Dom’s appeal has ruled that supply of pencils sharpener along with pencils is covered under the category of mixed supply.
The bench of B.V Siva Naga Kumari and Rajeev Topno while upholding AAR’s ruling has observed that since it is a mixed supply, the ISN code of the supply which attracts the higher rate of tax among all the taxable supplies contained in product DOMS A1, is required to be used. The 12% GST rate will be applicable till 17.7.2022, 18% GST shall be payable from 17.7.2022 to 28.2.2023 and 12% from 01/03/2023.
The appellant, Doms Pencils is a manufacturer & supplier of stationery items. The appellant supplies the goods in a combination with other products namely DOMS A1 pencil consisting of 10 pencils along with a sharpener & eraser. The next combination is DOMS Smart Kit. This is a gift pack which consists of a colouring book, two pack of pencils, one pack of colour pencils, one pack of oil pastels, one pack of plastic crayons, one pack of wax crayons, one eraser. one scale and one sharpener. DOMS my first pencil kit consisting of a pencil, ełaser, scale and a sharpener.
Consequent to the 47th meeting of the GST Council, vide notification No. 6/2022-CT (R), GST rate was increased on pencil sharpener. Scales & mathematical instruments are from 12% to 18%.
The applicant felt that he satisfies the four conditions to term the aforesaid supply as composite supply.
The appellant sought advance ruling on the issue whether the supply of pencils sharpener along with pencils being principal supply will be considered as the composite supply or mixed supply.
The applicant sought the advance ruling in respect of the HSN code to be used.
Yet another issue raised was whether supply of sharpener along with the kit having a nominal value will have an impact on rate of tax. If yes, what will be the rate of tax & HSN code to be used by use.
The AAR held that the supply of pencils sharpener along with pencils is covered under the category of ‘mixed supply’.
The AAAR held that product ‘DOMS A1 pencil’, is a mixed supply, the product not being naturally bundled, not having a principal supply and not supplied in conjunction with each other in the ordinary course of business.
Ruling Details
Applicant Name: DOMS Industries
Date: 22/01/2025
Read More: No GST Payable On Settlement Fee: AAAR
