TMI Blog2020 (12) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... ning an immovable property. It appears from the payment schedule (Clause 29) that the applicant receives 80% of the payment on delivery of the fabricated structures at the site. At the same time, the balance amount shall not be released till the applicant applies the final coat on the erected structures and the competent authority issues the completion certificate. Moreover, although the applicant is not responsible for erection of the fabricated structures, retention money @ 5% of the value of the work, deducted from each running bill, will be released only after successful completion of each span, which includes erection/launching of the spans (Clause 30). Therefore, the works contract part of the contract is inseparably linked with the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds on the applicable rate of tax on each of the two supplies. Being supply of the manufacturing service (SAC 9988) to a registered taxable person, the supply of the job work is taxable @ 12% in terms of Sl No. 26 (id) of the Rate Notification - The applicant s works contract service, being that of a sub-contractor engaged by the main contractor, therefore, is taxable @ 12% in terms of Sl No. 3(ix) of the Rate Notification. The mixed supply is, therefore, taxable @ 12% in terms of the provisions under section 8(b) of the GST Act. - Case Number WBAAR 14 of 2020 Order Number 14/WBAAR-20-21 - - - Dated:- 4-12-2020 - MS SUSMITA BHATTACHARYA, AND MR PARTHASARATHI DEY, MEMBER Preamble Applicant s representative heard : Sri Rip Das ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST Act. The officer concerned from the revenue has not objected to the admission of the application. The application is, therefore, admitted. 2. Submissions of the applicant 2.1 The applicant states that M/s S.P. Singla Construction Pvt Ltd (hereinafter the Principal) is engaged in the reconstruction of the Majherhat Railway Overbridge (ROB). The Principal has contracted with the applicant for fabrication, painting and transportation at the site of the Viaduct and Cable Stay part of the ROB. The applicant submits that the activities in terms of the above contract should be treated as job work. It provides a copy of the agreement. 2.2 According to the contract, the Principal provides all materials and drawing for fabricat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o analyze the terms of the contract between the Principal and the applicant. The Principal delivers the raw materials for fabrication at the applicant s unit free of cost (Clause no 4). The fabrication work is inspected at different stages by the designated engineer/ client/Principal (Clause14). The applicant is required to paint as per the approved specification. But, the scope of painting is restricted to surface preparation, metal spraying and one coat of paint at the shop (Clause 15). The final coat of paint will be done on-site after the completion of the erection. On receipt of the fabricated structures at the site, the Principal will do weighment, and the work shall be measured as per the above weighment (Clause 23). After completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of each span, which includes erection/launching of the spans (Clause 30). Therefore, the works contract part of the contract is inseparably linked with the job-work portion, and they cannot be treated as two separate contracts. 4.5 Notification No. 5050-F(Y) dated 16/08/2017 of the Government of West Bengal clarifies that works involving the supply of taxable goods along with the labour to any movable property (e.g. servicing of motor vehicles with motor parts, AMC for computers or AC machines or generator, repair of furniture etc.) are composite supplies, as the supply of goods and labour are naturally bundled and made in conjunction with one another. The principal supply, according to the said notification, is determined by the predo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a breach of contract for any defect in the erection work. Mere extension of the payment schedule does not turn the applicant s job description into a works contract. 4.8 The contract combines two separate services: (1) the job work of fabrication of steel structures and delivery thereof at the site with incidental supply of paint, and (2) works contract of applying a coat of paint to the steel structures after erection. Although they are supplied in conjunction with each other at a single price, they are not naturally bundled. The job work of fabrication ends with the delivery of the fabricated structures at the site. The works contract of applying paint to the erected structures is a separate supply made in conjunction with the job ..... X X X X Extracts X X X X X X X X Extracts X X X X
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