HC Holds Oilfield Contract as Composite Supply Under GST

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 19 March, 2026

Latest from Taxmann

Composite Supply Under GST

Case Details: Halliburton Offshore Services Inc. vs. Union of India [2026] 184 taxmann.com 260 (Andhra Pradesh)

Judiciary and Counsel Details

  • R. Raghunandan Rao & T.C.D. Sekhar, JJ.
  • Kadimisetty Sai Sreenadh for the Petitioner.
  • Santhi Chandra, Sr. Standing Counsel for the Respondent.

Facts of the Case

The petitioner, a foreign oilfield services company operating through its project office, executed a contract with Oil India Limited for provision of mud engineering services along with supply of drilling/completion fluid chemicals, laboratory/testing equipment, and related tools, with a condition that leftover chemicals would not be purchased by Oil India Limited. It sought an advance ruling on whether such supplies constituted a composite supply, however, the Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR) held that the supplies were not composite citing separate invoicing and absence of a single price. It was contended that the supplies were naturally bundled and supplied in conjunction as part of a single contractual obligation for efficient drilling. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that Section 2(30) of the CGST Act requires natural bundling and conjoint supply, and read with Sections 8 and 9, mandates taxation based on the principal supply. It was observed that mud engineering services and supply of specially prepared chemicals were intrinsically linked and inseparable for achieving safe and efficient drilling, and that separate invoicing or pricing would not alter the composite nature. Therefore, the Court held that the supply was a composite supply, set aside the rulings of the AAR and AAAR, and allowed the petitioner to seek a determination of the applicable rate.

List of Cases Reviewed

  • Halliburton Offshore Services Inc.. In re [Order dated 09.11.2020 passed by Andhra Pradesh Appellate authority for advance ruling] (para 21), reversed

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied