Supply of mud engineering service and supply of imported mud chemicals & additives is not a composite supply: AAAR

Case Details: Appellate Authority for Advance Ruling, Andhra Pradesh Halliburton Offshore Services Inc (Oil India), In re - [2022] 139 taxmann.com 427 (AAAR-Andhra Pradesh)

Judiciary and Counsel Details

• • Peeyush Kumar & Naresh Penumaka, Member
  • Prasad Paranjape, Adv. for the Applicant.

Facts of the Case

The appellant was awarded a contract to provide mud engineering and drilling waste management services. It filed an application for advance ruling to determine whether supply of mud engineering services and supply of imported mud chemicals and additives provided on consumption basis under the contract would qualify as composite supply. The Authority for Advance Ruling held that the contract of applicant for supply goods and services would not be considered as composite supply. It filed appeal against the order.

AAAR Held

The Appellate Authority for Advance Ruling observed that supply of mud engineering services and supply of imported mud chemicals were two specialized and distinct supplies and were separately available. As per the contract, both supplies were not supplied or provided as a complete package at a single price and tax invoices filed also revealed that different invoices were raised for both the supplies separately. Moreover, the schedule of rates were also provided separately in the contract and impugned supplies were not naturally bundled as the contract provided for right to seek replacement of personnel/goods independently in case they were not up to the satisfaction. Therefore, the decision of Authority for Advance Ruling was upheld.