Page 170 - GSTL_23rd April 2020_Vol 35_Part 4

496 GST LAW TIMES [ Vol. 35
3. Submission of the Revenue
3.1 The concerned officer from the Revenue agrees that the Applicant’s
supply is a works contract and qualifies to be called ‘original work’. However, he
submits that such a supply is taxable under Entry No. 3(v) of the Rate Notifica-
tion only if it is supplied to a government entity. He does not offer further com-
ment in this regard.
4. Observations and findings of the Bench
4.1 According to Serial No. 3(v)(a) of the Rate Notification, the compo-
site supply of works contract, as defined under Section 2(119) of the GST Act, sup-
plied by way of construction, erection, commissioning, or installation of original
works pertaining to railways, including monorail and metro, is taxable at 12% rate.
4.2 Works contract is defined under Section 2(119) of the GST Act as a
contract for 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. It is a composite supply treated as service in terms of para 6(a) of
Schedule II under Section 7(1A) of the GST Act.
4.3 Detailed Performance Specification of the contract (refer to Annex-
ure B to the Application) provides that the Applicant shall design, supply, install,
test and commission a computer based SCADA System for smooth operation,
monitoring, control, protection and logging of important features of the traction
and auxiliary power supply system on the Metro Corridor between Baranagar to
Dakshineswar section. The field work involves site survey, concept plan, design
and drawing, extensive wiring and laying of cables, civil works as required, and
testing and commissioning of the system. It is a composite supply of goods and
services. However, such supply will be called works contract only if it amounts
to erection and commissioning of an immovable property.
4.4 ”Immovable property” is not defined under the GST Act. The term
‘goods’ is defined under Section 2(52) of the GST Act as all kinds of moveable
properties other than money and securities but includes actionable claim, growing
crops, grass and things attached to or forming part of the land which are agreed
to be severed before supply or under a contract of supply.
Property other than goods, money and securities should, therefore, be
considered as ‘immovable property’ under the GST Act.
However, in the absence of a definitive explanation under the GST Act,
recourse is being taken to other allied Acts dealing with “property” to determine
the definition of “Immovable property”.
It is seen that Section 3(26) of the General Clauses Act, 1897 defines
“Immovable Property” as to include land, benefits to arise out of the land, and
things attached to the earth, or permanently fastened to anything attached to the earth.
Section 3 of the Transfer of Property Act, 1882 simply provides that un-
less there is something repugnant in the subject or context ‘immovable property’
does not include standing timber, growing crops or grass. The Section, however,
defines the term “attached to the earth” to mean (a) rooted in the earth, as in the
case of trees and shrubs, (b) embedded in the earth, as in the case of walls or
buildings, and (c) attached to what is so embedded for permanent beneficial en-
joyment of that to which it is attached.

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