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2020 (10) TMI 47 - AAAR - GSTLevy of GST - Works Contract - contract entered into with DMRC for supply, erection, installation, commissioning and testing of UPS system qualifies as supply of works contract under Section 2(119) of the Central Goods and Services Tax Act, 2017 - whether such supply made to DMRC would be taxable at the rate of 12% in terms of Sr. No. 3(v) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended w.e.f. 25.01.2018? HELD THAT:- The appellant is of the view that the supply of UPS system made from the state of Maharashtra would be leviable to GST at the rate of 18% as supply of goods and the supply of erection, installation and commissioning of UPS system made from Delhi GSTIN would be leviable to GST at the rate of 18% as supply of services separately. The supply of UPS system and erection and installation services is not dependent on each other and both the aforesaid supplies are capable of being made independently. The appellant submit that activity of erection and installation of UPS is a significant portion of the contract and not merely ancillary to the supply of UPS system. Hence, in the present case the supply of UPS system cannot be said to be a 'principal supply' to which the supply of erection and installation services is merely ancillary - the findings of the Ld. AAR that without supply of goods i.e. UPS system, the services of erection, installation and commissioning cannot be supplied by the appellant is incorrect. Circular No. 47/21/2018-GST dated 08.06.2018 issued by the CBIC, states that in case where a supply involves supply of goods and services and the value of each such supplies is shown separately, such supplied would be liable to GST separately as supply of goods and services. Thus, even in the present case, the supply of UPS system and erection and installation services supplied by appellant would be treated as separate individual supplies. The supply of UPS System and erection and installation services are provided by two distinct persons viz. Maharashtra GTIN and Delhi GSTIN. Thus, the said supplies cannot be clubbed together to make them a “composite supply”. Composite Supply or not - HELD THAT:- Section 2(30) of the CGST Act defines composite supply to mean a supply made by a taxable person, comprising of two or more supplies of goods or services, which are naturally bundled and supplied in conjunction with each other, wherein one of the supplies is a principal supply. Thus, in order to qualify as a 'composite supply, it is essential that all the supplies under a contract are made by a single registered person - In the present case, the supply of UPS system and erection and installation services are made by two distinct persons i.e. Maharashtra GSTIN and Delhi GSTIN respectively. The appellant submits that finding of the Ld. AAR that supply made by the appellant under the said contract qualifies as a composite supply is incorrect in law. Thus, the impugned ruling given by the Ld. AAR, to the extent it considers the supply of goods and services under the said contract as one composite supply, is liable to be set aside. The AAR ruling modified to the extent that the supplies under question would not be considered as “Composite Supply” in terms of section 2(30) read with section 2(90) of the CGST Act, 2017.
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