Nature of supply— The present appeal has been filed against the Advance Ruling pronounced by the Maharashtra Authority for Advance Ruling.

Appellant is engaged in the business of manufacturing camshafts. Camshafts are a rotating shaft mounted in a 4-stroke engine. The Appellant sells these manufactured camshafts to domestic as well as overseas customers. The overseas customers may be original equipment manufacturers (“OEM's” ) and use the camshafts for manufacturing engines such as Ford, General Motors do Brasil LTDA etc. or maybe machinist such as Musashi who would further supply the same to OEMs (“machinist”)

Advance Ruling authority has held that the activity of design and development of patterns used for manufacturing of camshaft for a customer is a supply of service in the form of intermediary service. MAAR observed that the M/S PCL is not providing any services to customers on its own account. The designs are provided to the third party vendors on behalf of the overseas customers of M/s PCL. The services provided by them is to their overseas customers and as per the requirements and directions of its overseas principals. Thus, MAAR held that M/S PCL is satisfying all the conditions of an intermediary and M/S PCL is supplying intermediary services as per the provisions of the IGST Act, 2017.

The moot issues before us are as to whether activity of appellant is an intermediary service as held by the MAAR or as contended by the appellant, an activity of design and development of patterns/tools used for manufacturing of camshafts, for a overseas customer is a composite supply where the principal supply is supply of services.

On careful perusal of the definition of the term “composite supply” and the essential conditions enumerated in the definition, it is seen that the composite supply comprising two or more taxable supplies of goods or services or both, or any combination thereof should be made by a taxable person to a recipient. However, in the instant case, considering the facts of the case, it is amply clear that impugned transaction between appellant and overseas customer is of supply of goods i.e. pattern/tool of specified specifications. Hence, contentions of the appellant that impugned transaction is composite supply where the principal supply is supply of services is not valid. In view of the above discussion, we hold that the impugned transaction is supply of goods i.e. pattern/tool of specified specifications.

Held that— This authority modify the Advance Ruling Order by holding that the impugned transaction between appellant and overseas customer is supply of goods.