Classification of service- In the instant case, the applicant has been providing coaching services under the physical classroom mode but now due to Covid environment, it is shifting its business model through remote channel partner network.

Question raised for advance ruling is as follows-

1. Applicant (REL) is supplying services of coaching to students which also includes along with coaching, supply of goods/printed material/test papers, uniform, bags and other goods to students. Such supplies are not charged separately but a lump sum amount is charged, the major component of which is imparting of coaching. In such situation, whether such supply of coaching services shall be considered, a supply of goods or a supply of services?

2. If the answer to the aforesaid first question is a supply of service, the applicant would like to know whether such supply of coaching services shall be considered as composite supply under section 2(30) of CGST Act, 2017? If yes what shall be the principal supply as per section 2(90) of CGST Act, 2017?

3. Applicant provides coaching services under a new business model through channel / Network Partners as per sample agreements attached, containing obligations of Applicant (REL) and such channel / Network partners. According to agreement, the channel / network partner provides the services to the students on behalf of Applicant. In such a situation, who shall be considered as supplier of coaching (REL) service and recipient of such service under the agreement?

4. Based upon above questions, what shall be the value of service provided by Applicant (REL) to students and by channel / network partner to Applicant (REL)?

5. Whether the Applicant (REL) shall be eligible to avail Input Tax Credit (ITC) for the supplies?

In the instant case, the applicant along with coaching services provides goods in the form of uniforms, bags, umbrellas, study material etc. These goods and services can be supplied separately and are not dependent on any other. Thus, the Supply in question shall qualify as 'mixed supply'. Further, it is clear that there are supplies of goods as well as services of various classification (i.e. HSN/SAC) having various tax rates which constitutes the predominant element of a mixed supply. Thus, in the present case, the supply is a mixed supply of goods as well as services and highest rate of tax is 18% (9% CGST+ 9% SGST or 18% in case of IGST).

Held that-  In the present case, the supply is a mixed supply of goods as well as services and attracts highest rate of tax @ 18%.

In the present case, the supply is a mixed supply of goods as well as services under section 2(74) of GST Act, 2017 and attracts highest rate of tax @ 18%

In the present case, Applicant will be supplier of mixed supply to the students and Network partner will be supplier of service to the applicant. The place of supply in both the cases (i.e. mixed supply to the students and supply of service to the applicant by the channel/network partner) would be determined as per Section (1) of section 10 of the IGST Act, 20 17 in respect of supply of goods and as per clause (b) of sub section (2) of section12 of the IGST Act, 2017 in respect of supply of service, as the case may be.

Total consolidated amount charged for which Tax invoice issued by the applicant to the student shall be the value of mixed supply by the applicant following the respective arrangement under section 15 of the CGST Act, 2017.

As per section 16 of the CGST Act, 2017, the applicant shall be eligible to take ITC of the GST paid on goods or services used or intended to be used in the course or furtherance of business subject to the conditions as prescribed and the provisions of the section 17 of the CGST Act, 2017.