Page 112 - GSTL_16th July 2020_Vol. 38_Part 3

350 GST LAW TIMES [ Vol. 38
both, or any combination thereof, which are naturally bundled and sup-
plied in conjunction with each other in the ordinary course of business, one
of which is a principal supply;
Illustration. - Where goods are packed and transported with insurance, the
supply of goods, packing materials, transport and insurance is a composite
supply and supply of goods is a principal supply;
14.2 We observe that the work order itself separately mentions under
Part B - Electro-mechanical work, for goods supply portion under sub-part (a)
Supply Part for Rs. 13.51 crore and for services supply portion under sub-part (b)
Installation Part for Rs. 1.18 crore. Further, as per point (c) at page 1 of the above
said work order, the applicant was required to submit to the Managing Director
of the Bihar State Milk Co-operative Federation Limited, Patna, the detailed item-
wise price break-up based on supply of individual equipment with GST rate ap-
plicable as per individual HSN code. Therefore the individual supply of the
above said Pouch Filling Machine does not fall under ‘Composite supply’ as de-
fined above with illustration.
14.3 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, construction, fabrica-
tion, completion, erection, installation, fitting out, improvement, modifica-
tion, 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;
14.4 We observe that coming into existence of an immovable property out
of the said works, is an essential ingredient to be covered under works contract,
e.g. Road, Building or Bridge etc. The supply being discussed herein relates to an
individual item of goods namely, Pouch Filling Machine with online pouch coding
machine of Make-Domino. This item being movable and saleable in the market
cannot in any case be termed as immovable property. However, it may be fixed
to earth after delivery at the place of the recipient but till the supply to the place
of the recipient it is movable. The item in question will already be in existence
before supply. This said item does not come into existence by virtue of any work
to be defined as works contract. The said items will not be manufactured at site
but it will be supplied from a manufacturer whose brand is also affixed on the
product, namely ‘DOMINO’. The Apex Court, in the case of M/s. Sirpur Paper
Mills Ltd. [1998 (97) E.L.T. 3 (S.C.)], has held that just because a plant and machinery
are fixed in the earth for better functioning, it does not automatically become an immova-
ble property.
14.5 In view of the above we find that the above said supply of Pouch
Filling Machine with online pouch coding machine of Make-Domino, is not an immov-
able property and hence supply of the same cannot be termed as supply of
‘works contract’.
(b) Supply by way of construction, erection, commissioning, or installation of
original works.
14.6 We find that the above discussed goods namely Pouch Filling Ma-
chine with online pouch coding machine of Make-Domino, is already in existence be-
fore supply and there is no construction at site to bring up a new original item in
existence.
GST LAW TIMES  16th July 2020  112