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2022 (7) TMI 641 - AAR - GSTClassification of supply - supply of services or not - works contract services - composite supply or not - benefit of Sl. No. 3 (v)(a) of notification no. 11/2017-Central Tax (Rate) as amended vide notification no. 20/2017-Central Tax (Rate) - HELD THAT:- As per Sl. No. 12B of Form GST ARA-01, the applicant is providing sub-contract services in relation to supply and commissioning of machinery and plants, mechanical engineering, electrical works etc. to IV' who has been allotted with a work by RVNL for construction of PEB shed, structure, building, water supply arrangement, drainage, sewerage, road works, track works, power supply and general electrical works, OHE works, signal & telecommunication works and supply, installation and commissioning of machinery and plant in connection with setting up of Electric Loco Shed at Saiyedpur Bhitri, Uttar Pradesh. Whether the works awarded to the applicant is a composite supply of the works contract service? - HELD THAT:- It is the Joint Venture Company and not the applicant which has been awarded the contract for construction of Electric Loco Shed. A Joint Venture Company, which is formed by two or more entities, has a separate existence than that of the said entities. The applicant has himself submitted that they are providing sub-contract services in relation to supply and commissioning of machinery and plants, mechanical engineering, electrical works etc. to `JV'. The supply of goods/services by the applicant can't be bundled with the JV which is separate entity, both having their separate GSTINs. As such, the goods/services supplied by the applicant to JV are to be examined for the purpose of their coverage in works contract. In the case of M/S. VIRGO INDUSTRIES (ENGINEERS) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE CHENNAI II COMMISSIONERATE, CHENNAI [2015 (4) TMI 247 - MADRAS HIGH COURT] the Madras High Court observed that an item fixed to the earth can continue to be movable if the same is capable of being shifted to another place without having to dismantle the same into constituent components and without causing substantial damaging to such individual components. For the goods/services supplied by the applicant to be covered in the works contract, it is necessary that the contracts enumerated therein should relate to immovable property. If the contract is otherwise or if the same results in movables, then it may be a composite supply but-not the works contract - the activities of installation, commissioning, testing, supplying mechanical work and electrical work are not in respect of immovable property as the Machinery and plant is attached to concrete base to prevent vibration/wobble free operation and preventing vibration/wobble free operation does not qualify for being described as attached to the earth under any one of the three clauses described above (para 14.5). Hence, the said supply of goods/services by the applicant to JV is not works contract. Whether the benefit of Sl. No. 3(v) of notification no. 11/2017-Central Tax (Rate) as amended vide notification no. 20/2017-Central Tax (Rate) is applicable to the subject works? - HELD THAT:- Sl. No. 3 (v) of the Notification No. 11/2017-Cetral Tax (Rate) dated 28.06.2017, as amended prescribed CGST rate @ 6% for composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, (other than that covered by item (i), (ia), (ib), (ic), (id), (ie) and (if) above) supplied by way of construction, erection, commissioning, or installation, of original works pertaining to railways, including monorail and metro - The rate prescribed vide sl. No. 3 (v) of the Notification No. 11/2017-Cetral Tax (Rate) dated 28.06.2017, as amended is applicable to composite supply of works contract and as the supply entrusted to the applicant vide JV Agreement is not a works contract, the applicant is not entitled for the benefit of the said notification.
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