Page 107 - GSTL_16th July 2020_Vol. 38_Part 3

2020 ] IN RE : MAGNAM NETLINK PVT. LTD. 345
5. The applicant contended that to fall under the above entry following
conditions must be satisfied :
(a) There should be composite supply of works contract.
(b) The supply should be by way of construction, erection, commission-
ing, or installation of original works.
(c) Such work should pertain to mechanised food grain handling sys-
tem, machinery or equipment for units processing agricultural pro-
duce as food stuff excluding alcoholic beverages.
6. The applicant further contended that for the present contract they
fulfil all the above referred conditions on the following grounds :
(a) There should be composite supply of works contract.
- The contract is indeed a composite supply of works contract
and hence the said condition is duly fulfilled. Works Contract
is defined under clause (119) of Section 2 of the Central
Goods and Services Tax Act, 2017, as under :
(119) “works contract” means a contract for building, construc-
tion, 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;
- Both the parts of the contract (i.e. Part-A and Part-B) shall fall
within the ambit of works contract. Part-A comprises of civil
work which involves construction of dairy building on turn-
key basis. The Contract under clause 2.0 provides that the
rate charged includes the cost of goods to be used for said
construction. The clause 4.0 on the same page provides that
all the civil materials are in the scope of the applicant. Further
since the contract is on “turnkey” basis, all the costs associat-
ed with the setting up of the dairy plant are in the scope of
the applicant. Hence this part will fall within the scope of
“works contract” since the same is in the nature of construc-
tion of civil structure specially designed for dairy which is an
immovable property and also includes transfer of property in
goods. Part-B comprises of supplying various dairy equip-
ments and carrying of installation and commissioning of the
same on turnkey basis. The dairy equipments after installa-
tion partakes the character of immovable property due to the
reasons that the recipient intends to obtain entire dairy plant
on turnkey basis along with the requisite machinery. Thus
the intent is to procure an immovable dairy plant on turnkey
basis and not to purchase individual equipments. The con-
tract clearly provides for designing and thereafter supply and
installation of the dairy equipments. Hence the contract un-
mistakably lays down that the applicant is appointed not
merely to supply equipments but there is design work even
before the supply of equipments. The Contract also provides
that the applicant shall be involved from the designing stage
itself since the same is in his scope which is even before the
GST LAW TIMES  16th July 2020  107