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2018 (12) TMI 1867 - AAR - GSTWorks Contract - Composite contract or not - making of supply of goods and services which are inter connected and inter-dependent on each other even though BOQ mentions separate value of goods and services - pre GST Period Contract - separate Sale and Service Billing in Pre GST period - contract for designing, installation and setting up of Automatic Fare Collection System for Lucknow Metro Project shall amount - Supply of Service or Work Contract - principal supply - rate of GST - LMRC Project - Rate of 18% or 12% to be charged after considering Rate Change Notification No. 1/2018- Integrated Tax (Rate) dated 25/01/2018 and all other provisions of GST Laws? Whether a contract can be treated as Composite Contract under GST if it involves making of supply of goods and services which are inter - connected and inter - dependent on each other even though BOQ mentions separate value of goods and services? - HELD THAT:- If the goods and services are naturally required to work together in an inter-connected and inter dependent manner and are required to complete the principal service as clearly stipulated in the illustration of the 'composite supply', the services will fall under the category of 'Composite Supply'. Whether a pre GST Period Contract can be treated as Composite Contract in GST even though there was separate Sale and Service Billing in Pre - GST period? - HELD THAT:- If the goods and services works together in inter-connected and inter-dependent manner and fall under the category of 'Composite Supply', the Contract executed under Pre- GST period would be treated as Composite Contract in GST era as in the GST era both sale and supply of services both are covered under GST Laws. Accordingly, the Contract laid down under Pre GST era be covered under Composite Contract in GST era under GST Laws, if the conditions for 'Composite Supply' are satisfied. Whether contract for designing, installation and setting up of Automatic Fare Collection System for Lucknow Metro Project shall amount to a Composite Contract with Principal Supply being Supply of Service or Work Contract? - HELD THAT:- The end structure or machinery that cannot be located/ moved or shifted elsewhere at frequent intervals will be considered as immovable property. Therefore, we find that the contract given to the applicant by LMRC for designing and installation of the Automatic Fare Collection System which cannot be shifted or moved to other places/ buildings at frequent intervals and is meant for permanent beneficial of the building i.e. Stations under LMRC; will fall under the 'Works Contract'. GST rate to be charged on LMRC Project i.e. Whether 18% or 12% to be charged after considering Rate Change Notification No. 1/2018- Integrated Tax (Rate) dated 25/01/2018 and all other provisions of GST Laws - HELD THAT:- Vide Notification No. 20/2017-Integrated Tax(Rate) dated 22.08.2017, the entries against serial number 3 for item (iii) in column (3) and the entries relating thereto in the Notification No. No. 1/2018-Integrated Tax (Rate) dated 25.01.2018, were substituted with “(v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Service Tax Act, 2017, supplied by way of construction, erection, commissioning or installation of original works pertaining to,- (a) railways, excluding monorail and metro; attracting the duty rate @ 12% - Later, vide Notification No. 1/2018-Integrated Tax (Rate) dated 25.01.2018 the notification No. 8/2017-Integrated Tax (Rate) was amended and the word `excluding' was substituted by 'including' also classifying that the Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Service Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity would attract duty at the rate of 12%. Since, in the instant case, the composite supply of work contract is being provided by a sub-contractor to the main contractor i.e. Government Authority, the same shall be covered under the amendment carried out vide the notification dated 25.01.2018, the same shall now attract duty at the rate 12%.
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