Page 246 - GSTL_21st May 2020_Vol 36_Part 3

492 GST LAW TIMES [ Vol. 36
2. Another contention made by the appellant is that the Contracts entered into by the
Appellant are not composite supply of services as work contract and services provided by
the Appellant are not in relation to immovable property.
49. Before deciding the taxation of aforesaid composite supply as per
Section 8 of GST Act we have to see whether the contracts/agreement before us
is a ‘works contract’ as defined in clause (119) of Section 2 of the CGST Act or
otherwise.
The definition of works contract is reproduced below.
(119) “works contract” means a contract for building, construction, fabri-
cation, completion, erection, installation, fitting out, improvement, modifi-
cation, 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;
Clause 6 of the Schedule II lists the two composite supplies which shall be treat-
ed as supply of services. Clause 6(a) of Schedule II of the CGST Act states that
Works Contract as defined in Clause (119) of Section 2 of the CGST Act shall be
treated as ‘supply of services’.
50. From the definition it is clear that it defines only those supplies as
works contract which are contracts for building, construction, fabrication etc. of
any immovable property. Now here we have to verify whether the execution of
the contract of the appellant with PGCIL i.e. Third contract and Fifth contract
which are the part of the whole contract of on-shore and off-shore supply of
goods and services for complete execution of +320KV, 2X 1000 MW, VSC Based
HVDC Terminals and DC XLPE Cable System between Pugalur and North Tri-
chur, results into immovable property or not.
Regarding this issue of immovability appellant in the grounds of appeal
has contended that...
“The goods specified in the contracts are not such that would be attached to
the earth and are not intended to be affixed permanently. Further, in the
present case, specific goods supplied by the Appellant are installed only for
the purpose of better functioning of the said goods and are capable of being
removed and transferred from one place to another. Hence, the fact that the
said goods are firmly but not permanently attached to the land, clearly
means that the goods in question do not per se come under the ambit of
immovable property.”
It can be seen from the definition that works contract involves activities of build-
ing, construction, fabrication, completion, erection, installation, fitting out, im-
provement, modification, repair, maintenance, renovation, alteration or commis-
sioning 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. However, these activities should be in respect of immovable property.
In order to decide whether the transaction is a works contract it is for us to de-
cide whether it is in respect of immovable property. The term ‘immovable prop-
erty’ has not been defined under the GST Act.
51. Appellant has submitted the photographs of the project site, in
support of his claim. The appellant has also submitted certain judgments in his
favour in defining the term immovability which are M/s. Sirpur Paper Mills v.
CCE, Hyderabad [1998 (1) SCC 400 = 1998 (97) E.L.T. 3 (S.C.)], Commissioner of Cen-
tral Excise v. Solid and Correct Engg. Works & Ors. [2010 (175) ECR 8 (SC) = 2010
GST LAW TIMES  21st May 2020  246