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2019 (3) TMI 925 - AAR - GSTClassification of supply - composite supply or not - Whether the works awarded by Integral coach Factory, Chennai for ‘Construction of shed, provision of M& Ps in ICF Shell/ furnishing Division, retro-fitment / re-conditioning / re-sitting /disposal of obsolete M & Ps of shell division including wet leasing of M & Ps and associated Electrical works on turn-key basis’ to the applicant is composite supply of services? - benefit of sl.No.3 (v) (a) as well as Sl.no. 3(vi) (a) of Notification No. 11/2017-C.T. (Rate) as amended - raising of invoice on completion of events/milestones - value of invoice. Held that:- This agreement is for supply of more than one taxable supply involving supply of goods and services such as machinery (both mechanical and electrical), construction, erection, installation, commissioning service etc. These supplies are bundled together in the agreement which is on turnkey basis and are required to be supplied together. Further, these activities are for an immovable property which is the factory here and involves transfer of property of all the goods involved in executing it. Therefore, this constitutes a supply of composite supply of works contract by the Applicant which is a supply of service as per Schedule II of CGST Act 2017. The agreement for wet leasing of Robotic spot welding machine and Laser cutting and welding machine as per Schedule V(a) and Schedule V(b) for a period of 10 years is a supply of right to use the equipment along with manpower service maintenance service etc. As multiple taxable supplies of services are involved, this is a composite service of service. However, this is not a works contract as there is no immovable property nor transfer of title of goods is involved. As per explanatory notes to classification of services for SAC 9973. The agreement of wet leasing of machinery falls under this classification of SAC 997319 for leasing of machinery with or without operator etc. - The agreement for Comprehensive Annual Maintenance Contract (CAMC) of Mechanical & Electrical under Schedule VI (a) and VI (b) will involve supply of goods, spares etc. and services and hence is a composite supply. This maintenance is in relation to the factory being erected, commissioned involving transfer of goods and hence is a composite supply of works contract which is a supply of service as per Schedule II of CGST Act 2017. Whether the benefit of SI.No.3 (v) (a) & 3(vi) (a) of notification no. 11/2017 as amended vide Notification 20/2017 - Central Tax (Rate) is applicable to subject works? - Held that:- The agreement for erection, commissioning, installation of plant and machinery for a factory to manufacture stainless steel coaches covering Schedule I, II, III, it is for supply of machine, plant and equipment’s including commissioning spares in Schedule I, erection and commissioning of all civil structures in Schedule Il, supply of electrical equipment including commissioning spares in Schedule Ill which is a composite supply of works contract for original works of construction, erection, commissioning, or installation pertaining to railways, is taxable at 6% CGST and as per Sl.No. of Notification No. 11/2017 -C.T.(Rate) and 6% SGST as per Sl.No. 3(v)(a) of Notification No. II(2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72 dated 29.06.2017 as amended with effect from 22.08.2017. Prior to that, it is taxable at 9% CGST and as per Sl.No. 3(ii) of Notification No. 11/2017 -C.T.(Rate) and 9% SGST as per Sl.No. 3(ii) of Notification No.ll(2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72 dated 29.06.2017 as amended - The agreement for wet leasing of Robotic spot welding machine and Laser cutting and welding machine as per Schedule V(a) and Schedule V(b) is not a works contract though it is a composite supply and hence is not eligible for SI.no. 3(v)(a) of this notification. Whether the applicant is required to raise invoice on completion of events/ milestones and remit the tax? - Held that:- As per Section 97 (2) of the CGST Act, time of raising invoices is not covered under the question on which Advance Ruling can be sought. Therefore, we are not examining this issue in this order. What is the value on which invoice has to be raised in case of event/milestone invoicing is required? - Held that:- The agreements prescribe the value of the various supplies of goods or services in the respective Schedules. It also prescribes the payment schedule and the delivery schedule for such works. The Applicant will be raising invoice based on the agreements in terms of Section 31 of CGST Act. The value of supply for each such invoice will be the transaction value and should include the amounts, if any, as specified in Section 15(2) and exclude the discounts, if any, as specified in Section 15(3) of CGST ACT 2017.
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