Works Contract Services under GST · Broad understanding and category of GST Rates under Works...
Transcript of Works Contract Services under GST · Broad understanding and category of GST Rates under Works...
Works Contract Services under GST
Definition : Section 2 (119) of CGST Act,2017
“Works Contract” means : -a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any IMMOVABLE PROPERTY
-wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;”
-Therefore, `works contract` shall only be applied on 14 types of contracts related to Immovable Property.
-Other contracts like fabrication of Iron steel goods, repair work done in automobile workshop shall not be considered under Works Contract. (Considered as Composite supply as defined u/s 2(30) of CGST Act,2017.)
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Immovable Property
-Word “Immovable Property” has not been defined under GST Act.
-The interpretation and definition of the same has to be taken from General Clauses Act
1897, wherein as per Section 3 (26) “Immovable property shall include land, benefits to
arise out of land and things attached to the earth, or permanently fastened to anything
attached to the earth .”
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Works Contract – Supply of Goods or Supply of Services?
Although this question has been discussed in length in the judgment of Hon`ble Supreme
Court in the case of State of Madras v. Gannon Dunkerley & Co (Madras) Ltd. [1959 SCR
379]
However, in the Para No.6(a) of Schedule-II of CGST Act, it has been clearly mentioned that
``works contract`` shall be considered as Composite supply of services.
Accordingly, under GST, Works Contract shall be categorised as Supply of Services.
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GST Rates in Works Contract
The master notification for the GST Rates is 11/2017 (CTR) dated 28.06.2017 which had described GST rates on various types of works contract depending on type of contracts, service receiver and service provider. Under the heading Construction Services S. No. 3 of the notification, initially three types of construction activities were introduced through clause (i) to (iii).
There have been various amendments till date regarding change in GST Rates in the said notification and many types of works contract activities were added through these notifications: -
20/2017 (CTR) dated 22.08.2017 24/2017 (CTR) dated 21.09.2017 31/2017 (CTR) dated 13.10.2017 46/2017 (CTR) dated 14.11.2017 01/2018 (CTR) dated 25.01.2018 17/2018 (CTR) dated 27.07.2018 30/2018 (CTR) dated 31.12.2018 03/2019 (CTR) dated 29.03.2019
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Works Contract Services provided to Government Departments Clauses (iii) and (vi) and (vii) at Serial No.3 of the notification states about works contract services provided to CG, SG, UT, a local authority, a Governmental Authority or a Government Entity by way of; -construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration.
Clause (iii) covers the works contracts for construction of: - Historical monuments canal, dam or other irrigation works; pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage
treatment or disposal GST Rate = 12%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Clause (vi) covers the works contracts for construction of: -
A civil structure or any other original works used other than for commerce, industry,
business or profession
A structure for use as educational, clinical or art or cultural establishment
A residential complex meant for self-use or use of employees specified in paragraph 3 of
the Schedule III of CGST Act,2017
GST Rate = 12%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Clause (vii) covers the works contracts wherein:
-more than 75% value of total contract is related to Earthwork.
Here earthwork is not defined in GST Act, however in common parlance it would be
understood as clearing of earth, excavation, laying of earth, which is basically done for
preparation of land for certain other purpose or further work to be executed on that
land.
GST Rate = 5%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Works Contract Services by Sub-Contractor
Clause (ix) covers the works contract services provided by a sub-contractor to the main contractor providing
services specified in clause (iii) and (vi) to the CG, SG, UT, a local authority, a Governmental Authority or a
Government Entity.
GST Rate = 12%
Clause (x) covers the works contract services provided by a sub-contractor to the main contractor providing
services specified in clause (vii) to the CG, SG, UT, a local authority, a Governmental Authority or a Government
Entity
GST Rate = 5%
Here in this case the words to be marked are ``by a sub-contractor to the main contractor``, hence in our opinion, if a sub-contractor further sub-lets a small part of work to another contractor then that transaction shall be taxable @ 18% under clause xii of notification.
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Works Contract Services relating to particular type of work
Clauses (iv) and (v) at Serial No.3 of the notification states about works contract services related to
particular type of work keeping aside the fact who is the awarder of contract.
Clause (iv) covers the works contracts related to construction of: -
Road, bridge, tunnel or terminal for road transportation for use by general public
a pollution control or effluent treatment plant, except located as a part of a factory;
structure meant for funeral, burial or cremation of deceased.
• Building owned by an entity registered under section 12AA of IT Act, used for carrying out the activities of providing, centralized cooking or distribution, for mid-day meals under the mid-day meal scheme sponsored by the CG, SG, UT, or local authorities.
GST Rate = 12%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Other than above there are various constructions under various schemes
A civil structure or any other original works pertaining to a scheme under : Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban) pertaining to lnsitu redevelopment of
existing slums using land as a resource; Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana pertaining to “Beneficiary led individual house
construction / enhancement”; Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban) pertaining to “Economically Weaker
Section (EWS) houses” constructed under the Affordable Housing in partnership by State or UT or local authority or UDA;
Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban) pertaining to houses constructed or acquired under the Credit Linked Subsidy Scheme for Economically Weaker Section (EWS)/ Lower Income Group (LIG)/ Middle Income Group-1 (MlG-1)/Middle Income Group-2 (MlG-2)”;
GST Rate is = 12%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Clause (v) covers the works contracts pertaining to: -
Railways, including monorail and metro
a single residential unit otherwise than as a part of a residential complex;
construction of low-cost houses upto 60 square meters per house approved by different authorities as
prescribed
Storage Infrastructure for post-harvest storages, cold storage
mechanised food grain handling system, machinery or equipment for units processing agricultural
produce as food stuff excluding alcoholic beverages.
GST Rate = 12%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Works Contract Services pertaining in respect of offshore works
Clause (viii) covers the works contracts pertaining in respect of offshore works contract relating to oil and gas
exploration and production (E&P) in the offshore area beyond 12 nautical miles from the nearest point of the
appropriate base line.
GST Rate =12%
Works Contract Services other than all above
Clause (xii) covers the all other works contracts that are not covered or mentioned above. In general, all the
contracts between private parties like construction of buildings, warehouses etc, shall covered under this entry.
GST Rate = 18%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
Works Contract services as mentioned in Entry No. 38 (Exception)
Service by way of construction or engineering or installation or other technical services, provided in
relation of setting up of following, -
a) Bio-gas plant
b) Solar power based devices
c) Solar power generating system
d) Wind mills, Wind Operated Electricity Generator (WOEG)
e) Waste to energy plants / devices
f) Ocean waves/tidal waves energy devices/plants
This entry shall be read in conjunction with serial number 234 of Schedule I of the notification No.1/2017-
Central Tax (Rate),
GST Rate = 18%
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Broad understanding and category of GST Rates under Works Contract
as per notification 11/2017 (as amended)
However, at Entry No.234 of Schedule-I of notification 1/2017, all the above items, if sold separately are
taxable @ 5%.
An explanation to entry no. 234 says that:
-if the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and
services, one of which being a taxable service specified in the entry at S. No. 38 as stated above,
-value of supply of goods for the purposes of this entry shall be deemed as 70% of the gross
consideration charged for all such supplies, and the remaining 30% of the gross consideration charged
shall be deemed as value of the said taxable service.
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Exempted Services under Works Contract
12/2017 (as amended)
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Works Contract Services provided to Government Departments
Entry No.3A of the notification states about works contract services provided to Central Government,
State Government, Union territory, a local authority, a Governmental Authority or a Government Entity ,
where value of goods is not more than 25% shall be exempted from GST.
ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Section 17 (5) (c) read as under:-
(c) works contract services when supplied for construction of an immovable property (other than plant
and machinery) except where it is an input service for further supply of works contract service;
Explanation––For the purposes of clauses (c) and (d), the expression “construction” includes re-
construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said
immovable property.
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ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Hence:
ITC related to works contract services cannot be claimed by service recipient.
Exceptions where ITC can be claimed:
If works contract services are related to plant and machinery
If works contract services are received by recipient for further supply of services
If expenses of works contract services are not capitalised and instead debited to Profit & Loss
account
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ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Case Study-1
o ABC Ltd. awarded a contract for complete construction of its showroom to XYZ Ltd. , that includes
civil structure, interior decoration, electrical fittings etc. Value of the work was calculated at Rs.10
Crores.
o In this case XYZ Ltd. will charge 18% GST on Rs. 10 crores to ABC Ltd. and ABC Ltd. will not be eligible
to claim ITC
Case Study -2
o In the above case XYZ Ltd. who is a contractor, sub-let the work of electrical fittings valuing Rs.2
crores to PQR Ltd. .
o In this case PQR Ltd. will charge 18% GST on Rs.2 crores to XYZ Ltd. and XYZ Ltd. will be eligible to
claim ITC.
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ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Case Study -3 o ABC Ltd. awards a contract of renovation of its showroom, to XYZ Ltd. valuing Rs. 50 Lacs. o In this case XYZ Ltd. will charge 18% GST on Rs.50 Lacs to ABC Ltd.
Now here, if ABC books the expenses as revenue expenditure, ITC can be claimed. However, if this amount is capitalised by ABC then ITC cannot be claimed.
Case Study -4 o ABC Ltd. have bought new machineries in its factories, and a strong foundation is needed so that to
install the machineries firmly. Work of foundation is awarded to XYZ Ltd. for Rs 10 Lacs. o In this case XYZ Ltd. will charge 18% GST on Rs.10 Lacs to ABC Ltd. and ABC shall be eligible to claim
ITC particularly in lieu of the foundation, because foundation is included in the definition of plant and machinery. (Reference to second Explanation to Section 17(5))
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ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Case Study -5
o A company took a land on lease for development of resort for 30 years from a Government entity.
The completion of project took 2 years, hence the lease premium and lease rent paid during the
pre-operative period i.e. 2 years was capitalised by the company. Whether the GST paid on lease
rent shall be admissible ITC or not ?
o Here reference is taken from the judgement of GGL Hotel and Resort Company Ltd. [2019] 105
taxmann.com 248 (GST AAAR West Bengal), wherein the appellate authority has observed in para
no.14 of the order that lease rent paid during pre-operative period has direct nexus with the
construction of the resort, hence the ITC on such lease rent is inadmissible.
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ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Case Study -6
o A company got certain repairing jobs of various nature such as:
Building Repairing Works
Electric Installation repairing work
Sanitary fitting repairing works
Furniture & Fixtures repairing work
In this case:
If the expenses are capitalised to immovable property: ITC shall NOT be allowed to the extent of
capitalisation
If repairing is related to movable properties: ITC shall be allowed
Reference is taken from Advance Ruling of Rambagh palace Hotels Pvt. Ltd. (GST AAR Rajasthan) Advance Ruling No. RAJ/AAR/2019-20/05 dated 30/04/2019
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ITC of Works Contract services
(Section 17 (5) (c) of CGST Act
Case Study -7
o A company is involved in construction of large shopping malls for the purpose of letting out its
property. The company is also paying GST on its rent income. Company has accumulated amount of
ITC in respect of purchases of inputs in the form of goods and services.
o Hon`ble Orrisa High Court in the judgment of Safari Retreats Private Limited Vs Chief Commissioner
of Central Goods & Service tax (Orissa High Court) (W.P. (C) No. 20463 of 2018) has held that if the
assessee is required to pay GST on the rental income arising out of the investment on which he has
paid GST, it is required to have the input credit on the GST
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Place of supply
Section 2(86) of CGST Act, read with Section 12(3)(a) of IGST Act
In the case of Works Contract services location of immovable property shall be important to determine
the place of supply.
If recipient of service or supplier of services are located in India, place of Supply shall be the location
at which the immovable property is located or intended to be located. (Section 12(3)(a) of IGST Act)
If location of immovable property is outside India, place of supply shall be the location of the
recipient. (Provision to Section 12(3) of IGST Act)
If either recipient of service or supplier of services is located outside India, place of supply shall be
the location at which immovable property is situated (Section 13(4) of IGST Act).
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Place of supply
Section 2(86) of CGST Act, read with Section 12(3)(a) of IGST Act
Examples:
ABC, Jaipur awards XYZ, Jaipur a contract for construction of warehouse at Jaipur, place of supply shall
be Jaipur. CGST & SGST shall be charged by XYZ, Jaipur (Section 12(3)(a) of IGST Act)
ABC, Jaipur awards XYZ, Delhi a contract for construction of warehouse at Jaipur, place of supply shall be
Jaipur. IGST shall be charged by XYZ, Delhi (Section 12(3)(a) of IGST Act)
ABC, Jaipur awards XYZ, Jaipur a contract for construction of warehouse at Delhi, place of supply shall be
Delhi. IGST shall be charged by XYZ, Jaipur (Section 12(3)(a) of IGST Act)
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Place of supply
Section 2(86) of CGST Act, read with Section 12(3)(a) of IGST Act
ABC, Jaipur awards XYZ, Delhi a contract for construction of warehouse at Dubai, place of supply shall be
Jaipur. IGST shall be charged by XYZ, Delhi (Provision to Section 12(3) of IGST Act)
PHED, Jaipur awards XYZ, Jaipur a contract for installation of water pipeline of 100 KMs which run from Neemrana (Rajasthan) to Gurgaon (Haryana), wherein 60Kms is in Rajasthan and balance 40Kms is in Gurgaon. Hence accordingly, services shall be deemed to be supplied in 60:40 ratio in Rajasthan and Haryana (Rule 4 of IGST Rules)
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Time of supply
Section 13 of CGST Act read with Section 31 of CGST Act
As per Section 13 (2), Time of Supply of service shall be determined as earliest of the following: -
a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed
under section 31 or the date of receipt of payment, whichever is earlier; or
b) the date of provision of service, if the invoice is not issued within the period prescribed
under section 31 or the date of receipt of payment, whichever is earlier; or
c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply:
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Time of supply
Section 13 of CGST Act read with Section 31 of CGST Act
Case: When Invoice is issued by the supplier, within 30 days from date of supply of service:
Date of event Particulars Whether Time of Supply applied?
14/04/2020 Contract awarded of Rs. 10 lacs NA
15/04/2020 Advance Received of Rs 1 Lac Yes, Value shall be Rs 1 Lac
30/04/2020 Advance Received of Rs 1 Lac Yes, Value shall be Rs 1 Lac
31/05/2020 Advance Received of Rs 3 Lac Yes, Value shall be Rs 3 Lacs
15/06/2020 Work execution completed
20/06/2020 Final Invoice issued by supplier Yes, Value shall be balance Rs 5 Lac
30/06/2020 Balance Payment Received NA
30/09/2020 Final Payment Received NA
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Time of supply
Section 13 of CGST Act read with Section 31 of CGST Act
Case: When Invoice is NOT issued by the supplier, within 30 days from date of supply of service:
Date of event Particulars Whether Time of Supply applied?
14/04/2020 Contract awarded of Rs. 10 lacs NA
15/04/2020 Advance Received of Rs 1 Lac Yes, Value shall be Rs 1 Lac
30/04/2020 Advance Received of Rs 1 Lac Yes, Value shall be Rs 1 Lac
31/05/2020 Advance Received of Rs 3 Lac Yes, Value shall be Rs 3 Lacs
15/06/2020 Work execution completed Yes, Value shall be balance Rs 5 Lacs (because invoice
not issued within 30 days)
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Time of supply
Section 13 of CGST Act read with Section 31 of CGST Act
Furthermore, in case of Works contract services there are contracts wherein period of contract extends
to more than 3 months, which is defined as ``continuous supply of services`` under Section 2(33) of
CGST Act and accordingly Section 31(5) of CGST Act has to be applied for the time to issue tax invoice: -
a) where the due date of payment is ascertainable from the contract, the invoice shall be issued on or
before the due date of payment;
b) where the due date of payment is not ascertainable from the contract, the invoice shall be issued
before or at the time when the supplier of service receives the payment;
c) where the payment is linked to the completion of an event, the invoice shall be issued on or before
the date of completion of that event.
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Records to be maintained by a Supplier of Works Contract services
Rule 56 (14) of CGST Rules
Rule 56 (14) of CGST Rules, prescribes the records and accounts to be maintained:
(14) Every registered person executing works contract shall keep separate accounts for works contract
showing –
a) the names and addresses of the persons on whose behalf the works contract is executed and
suppliers from whom goods or services are received;
b) description, value and quantity (wherever applicable) of goods or services:
a. received for the execution of works contract;
b. utilized in the execution of works contract;
c) the details of payment received.
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E-way Bill
In the case of works contract, whenever material is procured, it is directly delivered at work site by the
seller and accordingly E-way bill is generated by that seller under Bill To- Ship To model.
No requirement of generation of E-way bill by the contractor.
In some cases, the goods are procured by the contractor and stored in its godown at principal address or
may be stored at a store nearest to the work site.
For dispatch of material from the store/godown to the work site, a Delivery Challan as prescribed in Rule
55 of CGST Rules and an E-way bill shall be issued with the details as mentioned in the delivery challan.
No requirement to generate E-way Bill, when the invoice related to Works Contract services are issued.
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TDS (Tax Deducted at Source)
(Section-51 & Rule 66)
Section 51 of CGST Act, states that if any supply (in this case supply of works contract services) is made
under a contract and value of that supply > Rs. 2.50 lacs, awarder shall deduct TDS @ 2% while making
payments to the contractors.
This provision is applicable on the contracts awarded by:
a) CG, SG departments
b) Local Authority
c) Government agencies
d) Or any other persons as may be notified by the Government
The said TDS can be claimed through GST Portal and after being claimed the amount is reflected in the
cash ledger of respective heads.
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Refunds
(Section 54 and Rule 89)
• In case of contractors, GST rates on outward supplies are 12% or 18% and GST Rates on inputs and
input services varies from 12% to 28%. This results in accumulation of ITC.
• Also, in the course of work execution contractors receives Input Services from their sub-contractors,
wherein ITC is claimed by contractor on their invoices.
Section 54(3) states about claim of refunds in the case of accumulated ITC, but there is a restriction of
refund only related to ITC of Inputs and not for Input Services. Therefore, in our opinion and practically,
refund of accumulated ITC may not be claimed by contractors, where contractors are claiming ITC related
to input services.
For contractors dealing in Government awarded contracts TDS @ 2% is deducted, which may get
accumulated in the cash ledger, if not used against the liabilities, this amount can be claimed for refund.
(Section 49 (6) r/w Provision to Section 54(1))
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Valuation
(Section-15 r/w chapter-VI of CGST Rules)
There is no specific section or rules drafted for the valuation of works contract supplies, however section
15 shall apply for the purpose of valuation.
In the case of works contract if transfer of property in land or undivided share of land is included
then:
Value of supply of service and goods portion in such supply =
Total amount charged for such supply (-) Value of share of land or undivided share of land
Here total amount means sum total of consideration charged for the aforesaid service and amount
charged for transfer of land or undivided share of land, as the case may be. (Value of land shall deem
to be 33% of total value of supply) (Note-2 of Notification 11/2017)
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Valuation
(Section-15 r/w chapter-VI of CGST Rules)
In case of works contract if transfer of property in land or undivided share of land is NOT included then
the transaction value shall be the value of supply.
Further, for the purpose of valuation following shall be included in the value of taxable supply:
1. Any taxes, fees or charged levied under any other law apart from GST
2. Expenses incurred by the buyer on behalf of the supplier
3. Interest, late-fees or penalty
4. Any direct subsidies or subsidies provided by the government
5. Any other incidental expenses such as commission or packaging and handling costs incurred by the
supplier.
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Valuation
(Section-15 r/w chapter-VI of CGST Rules)
Example
ABC enters into a contract with XYZ of Rs 50 Crores (plus GST) for construction of a warehouse on
turnkey basis i.e. including all the procurements and erection. However, XYZ states that Cement and
Steel shall be provided by XYZ, which approximately values Rs 15 Crores.
In this case although the ABC shall be billing for Rs 35 Crores, but the taxable value for GST shall be Rs.
50 Crores and accordingly GST has to be charges at value of Rs 50 Crores. (Section 15(2)(b)).
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Recent Advance Rulings regarding Works Contract
Applicant Name: NEC Technologies India Pvt. Ltd.
AAR: Gujarat
AAR No.: GUJ/GAAR/R/2020/07 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2018/AR/56)
Date: 19/05/2020
Applicant receives a contract from Surat Municipal Corporation and M/s Surat Smart City Development
Limited for design, development, implementation, maintenance and management of open loop
solution based Automatic Fare Collection (AFC) System for Bus Rapid Transit System and City Bus
Operation in Surat City.
Held that, supply made shall be a composite supply u/s 2(30) of CGST Act, because AFC project does
not qualify as an original works meant predominantly for use other than for commerce, industry, or
any other business or profession
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Recent Advance Rulings regarding Works Contract
Applicant Name: Arg Electricals Pvt. Ltd.
AAR: RAJASTHAN
AAR No.: ADVANCE RULING NO. RAJ/AAR/2020-21/04
Date: 14/05/2020
Applicant receives two contracts from AVVNL for Supply of material/equipment and Erection, testing
and commissioning of supplied material/equipment Rural Electricity Infrastructure for Household
electrification from AVVNL. Both contracts were through single tender.
Held that, work undertaken by applicant shall be Composite supply of works contract as both the
contracts are very intricately linked to each other and without performing the one, the other part can't
be done. However, the contract shall not be covered under Entry No. 3(vi)(a) of the Notification
11/2017(CTR) because it does not qualify as an original works meant predominantly for use other than
for commerce, industry, or any other business or profession. Hence shall be taxable @ 18%
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Recent Advance Rulings regarding Works Contract
Applicant Name: Kalyan Toll Infrastructure Ltd.
AAR: MADHYA PRADESH
AAR No.: Case Number 04/2019 and Order Number 16/2019
Date: 25/09/2019
Applicant receives contract through e-tender, by M P Power Generating Company Ltd. for Balance
General Civil and related to Electrical and Mechanical works. The tender document, though a
consolidated work order, has categorical mentions of individual works to be carried out by the
applicant with specific remunerations for each such work.
Held that, the tender document in question is a not consolidated contract and each supply under the
said contract shall be chargeable to tax individually, depending upon the individual classification of
such supplies and rate of tax applicable at the time of supply.
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Recent Advance Rulings regarding Works Contract
Applicant Name: United Engineering Works,
AAR: KARNATAKA
AAR No.: AAR KAR ADRG 15/2019
Date: 25/07/2019
Applicant receives contract for supply of submersible pump sets & accessories along with installation,
electrification and energisation of the same in the already drilled bore wells. Applicant seeks advance
ruling to know the GST Rate applicable on the contract.
Held that, the Applicant's supply does not qualify as “Works contract” because supply of any activity
does not amount to construction of immovable property. It is a composite supply wherein the principal
supply is that of the supply of goods i.e submersible pumps. The applicable GST rate to the applicant's
supply would be the rate applicable on the Principal supply i.e. submersible pump sets.
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Recent Advance Rulings regarding Works Contract
Applicant Name: M/S. Vikram Sarabhai Space Center,
AAR: KERALA
AAR No.: AAR No. KER/43/2019
Date: 12/04/2019
Applicant entered into a contract with Tata Projects Ltd, Mumbai for design, fabrication, procurement,
instrumentation and control and commissioning of Trisonic Wind Tunnel with Ejector System.
Held that, being a works contract awarded by the Central Government department by way of
construction, erection, commissioning, installation, completion, fitting out, of a civil structure or any
other original works meant predominantly for use other than for commerce, industry, or any other
business or profession will attract 12% GST.
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