Page 108 - GSTL_16th July 2020_Vol. 38_Part 3

346 GST LAW TIMES [ Vol. 38
supply of equipments. The Contract does not merely provide
for supply of dairy equipments but also provides for installa-
tion and commissioning of dairy plant. Hence it cannot be
termed as a contract for mere supply of goods. The Contract
under clause 20.0 provides that the applicant shall obtain all
the necessary approvals from the Factory inspector, Boiler in-
spector, Electrical inspector, Weights & Measures Inspector,
Explosive Inspector as well as all other relevant authorities at
the cost of the applicant. Hence the contract is clearly for set-
ting up of the dairy plant on turnkey basis and not merely of
supply of goods. Relying the decision of the Apex Court in
the case of M/s. TTG Industries Limited [2004 (167) E.L.T. 501
(S.C.)], the applicant submitted that what emerges out of the
activity carried out by the applicant is a dairy plant which is
immovable in nature and hence the same cannot be moved
without first dismantling it. The dairy plant so commissioned
by the applicant is never intended to be shifted to any other
location. Moreover it can even not be shifted without disman-
tling the same and hence the same satisfies the test of “per-
manency”. Thus the dairy plant shall tantamount to immov-
able property. The dairy plant commissioned at site is inca-
pable of being sold as it is and hence partakes the character of
immovable property. The Apex Court decision in the case of
M/s. Sirpur Paper Mills Ltd. [1998 (97) E.L.T. 3] shall not be
applicable to the present facts since in that case the whole
purpose behind attaching the machine to a concrete base was
to prevent wobbling of the machine and to secure maximum
operational efficiency. In the present case the whole purpose
is to commission a dairy plant at the site of the recipient and
hence the same has to be considered as an immovable proper-
ty. Therefore, it is contended that the design, supply, installa-
tion and commissioning of the dairy plant under the referred
contract shall be considered as a “works contract” under Sec-
tion 2(119) of the CGST Act, 2017.
(b) The supply should be by way of construction, erection, commissioning, or
installation of original works.
- Original works is defined under clause (zs) of the definition
section under Notification No. 12/2017-Central Tax (Rate),
dated 28-6-2017 as under :
[(zs) “original works” means-all new constructions -
(i) all types of additions and alterations to abandoned or
damaged structures on land that are required to make
them workable;
(ii) erection, commissioning or installation of plant, machin-
ery or equipment or structures, whether pre-fabricated or
otherwise;]
- The contract in question clearly stipulates new construction of
entire dairy plant along with the supply and installation of
dairy equipments and machinery. Hence the said condition is
duly fulfilled.
GST LAW TIMES  16th July 2020  108