Classification of service— The present appeal has been filed against the Advance Ruling issued by Authority for Advance Ruling, Andhra Pradesh.

The issue at hand for discussion is whether the supply of mud engineering services and supply of imported mud chemicals and additives provided on consumption basis by the applicant under the contract qualify as composite supply or not.

In the instant case, the two taxable supplies under discussion are to be examined in light of the two primary conditions i.e., whether they are 'naturally bundled' and are 'supplied in conjunction' with each other.

in the instant case the supply of chemical and additives and mud engineering services can be procured in a piecemeal approach up to the satisfaction of the service recipient. It is a fact, as admitted by the appellant that it is a clause inserted in the contract to protect the interest of OIL, the right to seek replacement of the personnel/ goods independently if they are not as per satisfaction of OIL. It clearly indicates that both the supplies are not naturally bundled.

Held that— the supply of mud engineering services and supply of chemicals and other additives are neither naturally bundled nor supplied in conjunction with each other and they do not constitute a “Composite Supply” under the section (2) sub-section (30) of the CGST Act, 2017.

Accordingly the said supplies of the mud engineering services and supply of chemicals and additives are different supplies liable to tax under the CGST/APGST Act. Thus, in view of the above discussions the observation made by the Advance Ruling Authority is upheld, rejecting the interpretation of the appellant.