TMI Blog2020 (7) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the Government .and therefore, is not chargeable to concessional rate of 12% as per the Notification No.11/2017 dated, 28.06.2017. The contract in questions i.e. work order relating to supply, installation and fixing of customized furniture in a building conform to the COMPOSITE SUPPLY as provided in section 2(30) of CGST Act, 2017. The supply made by the applicant to the Capital Project Administration consists of Two taxable supplies of Goods and Services, which are naturally bundled and supplied in conjunction with each others, where the supply of goods viz. Furniture is the principal supply. Thus, the work order in question shall merit classification under Chapter Head 9403 of GST Tariff and shall be liable to GST at the rate applicable at the time of supply. - Case No. 03/2020, Order No. 08/2020 - - - Dated:- 5-3-2020 - SHRI MANOJ KUMAR CHOUBEY AND SHRI VIRENDRA KUMAR JAIN, MEMBER Present on behalf of applicant : S. Krishnan, Chartered Accountant PROCEEDINGS (Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods Service Tax Act, 2017) 1. The present application has been filed u/s 97 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant appeared for personal hearing on behalf of the applicant and reiterated the submissions made in the application. 5.2 The applicant states that The contract placed by Capital Project Administration - a Department of Govt. of Madhya Pradesh, the awarding of contract is of the view that the same is of the nature of works contract as per section 2(119) of CGST Act and the concessional rate of tax of 12% (6% CGST 6% SGST) is applicable as per Notification No.11/2017-Central Tax (Rate) dated, 28.06.2017 and the Notification No.20/2017-Central Tax (Rate) dated, 22.08.2017. 5.3 As per SI.No.1 of Heading 9954 (Construction Services) of Notification No. 11/2017-Central Tax (Rate) dated, 28.06.2017 amended from time to time, the rate of tax is as under:- S.No. Chapter, Section or Heading Description of service Rate (per cent) Condition 2 Section 5 Construction services 3 Heading 9954 (Construction services) (vi) Composite supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch contract. 5.5 As per Annexure - Scheme of Classification of services to Notification No.11/2017-Central Tax (Rate) dated, 28.06.2017, works contract services has been classified as construction services- under heading 9954, which includes the following groups; Group Service description 99541 Construction services of buildings 99542 General construction services of civil engineering works 99543 Site preparation services 99544 Assembly and erection of prefabricated construction. 99545 Special trade construction services 99546 Installation services 99547 Building completion and finishing services 5.6 The claim as made by the CPA, Bhopal, which is a Department of the State Government, in their letter dated, 28.12.2019 that the supply, installation and fixing of customized furniture for newly constructed Mantralaya, Vallabh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T) as per Sl.No.438 of Schedule III of CGST Act under HSN 9403 with effect from 15.11.2017. The supply of furniture which may or may not be customized and the installation thereof are naturally bundled and as per business practice, the furniture is supplied in conjunction with their installation and fixing. In the applicant's view point, the supply of furniture and the installation and fixing thereof is composite supply of goods and the rate of tax of furniture which is principal supply is applicable to composite supply. 5.13 As per the contract executed with CPA, item-wise prices of furniture in the tender were required to be submitted which were approved by the contractee CPA. The items mentioned were such as Main Table + ERU, Back Runner for Minister etc. The invoice issued by the applicant to the CPA was item-wise and consolidated transaction price was charged. The installation / fixing charges are not separately charged in the invoice, nor these charges are required to be charged item-wise. 5.14 As per section 10(1)(d) of IGST Act, where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly. It means t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profession. It is evident that the composite supply of works contract of a civil structure must result in the creation of immovable property, which is not happening by any stretch of imagination in the case of the applicant, or the composite supply of works contract must be of original works. The Notification No.12/2017-Central Tax (Rate) dated. 28.06.2017 defines original works as under:- (zs) original works means - all new constructions; (i) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable. (ii) erection, commissioning or installation of plant, machinery or equipment or structures , whether pre-fabricated or otherwise . The supply and installation of furniture by the applicant will not cover under works contract of original works, as it is neither new construction nor it is additions and alterations to abandoned or damaged structures on land that are required to make them workable. Moreover, the applicant's work does not cover under erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise. The said entry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as construction service (under heading 9954, which includes the following groups; Group Service description 99541 Construction services of buildings 99542 General construction services of civil engineering works 99543 Site preparation services 99544 Assembly and erection of prefabricated construction. 99545 Special trade construction services 99546 Installation services 99547 Building completion and finishing services 6.6 The claim as made by the CPA, Bhopal, - which is a Department of the State Government, in their letter dated, 28.12.2019 that the supply, installation and fixing of customized furniture for newly constructed Mantralaya, Vallabh Bhawan Extension, Bhopal is covered under composite supply of works contract as defined u/s 2(119) of CGST Act and the rate of tax applicable to the said supply is 12% as per Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo taxable supplies of Goods and Services, which are naturally bundled and supplied in conjunction with each others, where the supply of goods viz. Furniture is the principal supply. We thus hold that the work order in question shall merit classification under Chapter Head 9403 of GST Tariff and shall be liable to GST at the rate applicable at the time of supply. 7. RULING (Under Section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017) 7.1 The activities of supply, installation and fixing of furniture to be performed by the applicant cannot be classified under Heading 9954 - Construction services, as provided in Sl.No.1 of Notification No.11/2017-Central Tax (Rate) dated, 28.06.2017, as amended from time to time. Rather, the contract conforms to composite supply as provided in Section 2 (30) of GST Act, 2017 . The supply made by the applicant consists of two taxable supplies of goods and services which are naturally bundled and supplied in conjunction with each other, where the supply of goods i.e. furniture is the principal supply . 7.2 The goods shall merit classification under Chapter Head 9403 of GST Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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