Gujarat GST Advance Ruling on Blasting Services as Composite Supply
- Ruling
- GUJ/GAAR/RULING/2018/17 dated 27.08.2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
In short
The company asked the Gujarat Authority for Advance Ruling (GAAR) whether their blasting work is a supply of goods or a supply of service under the Goods and Services Tax (GST) law. They argued it was a service because they do not sell the explosives to the client, but the authority disagreed.
What has changed
How it worked before
Many businesses in the mining and construction sectors assumed that blasting work was purely a service because the explosives are consumed during the process rather than sold. They often billed these activities as professional services without accounting for the goods component separately.
What has changed
The authority ruled that blasting is a composite supply, meaning it involves both goods and services provided together. In practice, this means you must treat the activity as a single package where the tax treatment follows the principal supply, rather than ignoring the explosives used.
Who this affects
This ruling is relevant for contractors in the mining, quarrying, and construction industries who perform blasting activities using their own explosives for clients.
What you should do
You should review your current billing and tax classification if you perform similar blasting work. Remember that an Advance Ruling only binds the specific business that asked for it and their local tax office, so it does not automatically change the law for your own business or state.
The ruling in detail
Authority for Advance Ruling
M/s. Khedut Hat
GUJ/GAAR/RULING/2018/17 dated 27.08.2018 · Gujarat
Questions before the authority
- Whether the blasting activity carried out by the applicant is to be considered as a 'supply of goods' or 'supply of service'?
Facts
The applicant is engaged in blasting work at various sites using explosives procured under a license. The applicant performs the blasting activity for clients, which involves filling holes with explosives and detonating them in a specific sequence. The applicant argued that since title to the explosives is not transferred to the client, the activity should be treated as a supply of service.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of blasting activity | Composite supply Covered under Section 2(30) and Section 8(a) of the CGST/GGST Act |
The authority ruled that the blasting activity constitutes a **composite supply** of goods and services. It rejected the applicant's contention that the activity is purely a supply of service.
Reasoning
The authority relied on the Supreme Court judgment in State of Gujarat vs. Bharat Pest Control to determine that the use of explosives in blasting work constitutes a deemed supply of goods alongside the service component. Consequently, the activity is classified as a **composite supply** under Section 2(30) of the CGST Act. The authority noted that the definition of supply is inclusive and that Schedule II is not exhaustive for determining the scope of supply.
Provisions relied on
- Section 2(30) of the CGST Act, 2017
- Section 7 of the CGST Act, 2017
- Section 8(a) of the CGST Act, 2017
- Section 97(2)(g) of the CGST Act, 2017
For the practitioner
This ruling clarifies that blasting services involving the use of explosives are treated as a **composite supply** rather than a pure service. It is useful for practitioners advising clients in the mining or construction sector who provide similar integrated services. It does not, however, provide specific guidance on the tax rate applicable to such composite supplies.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/guj.17-2018-19_dt_27.08.18_kedh.pdf
Legibility of the scan, as read: high.
Prepared 21-10-2026.
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