Page 101 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] IN RE : METHODEX SYSTEMS PVT. LTD. 427
tion 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. In the light of definition of “works contract” under GST, any con-
tract for building, construction, installation, fitting out etc. must be of immovable
property.
5.16 As per the definition of “works contract” u/s 2(119) of CGST Act,
the contract must result into immovable property and the contract must be for crea-
tion of immovable property and the result of the said contract should be immov-
able property or part thereof.
5.17 The supply, installation and fixing of furniture, customized or cus-
tomized cannot be a works contract, as the items of furniture have been made or
manufactured at the supplier’s place which have been installed or fixed at the
place of the recipient. Such installed or fixed items of furniture can be re-
moved/moved to any place without damage to the furniture. Thus, supply, in-
stallation and fixing of furniture cannot be covered under works contract, as it
does not result in immovable property or it is not going to be part of immovable
property.
5.18 As per Sl. No. 3(vi) of Notification No. 11/2017-Central Tax (Rate),
composite supply of works contract as defined u/s 2(119) of CGST Act, provided
to the Central Government, State Government etc. by way of construction, erec-
tion, commissioning, installation, completion, fitting out, repair, maintenance,
renovation or alteration of a civil structure or any other original works meant
predominately for use other than for commerce, industry, or any other business
or profession covered under Heading 9954 are chargeable to tax @ 12% (CGST
6% & SGST 6%). The Heading 9954 does not include the supply, installation or
fixing of furniture customized or not customized in a building.
5.19 Sl. No. 3(vi) of Notification No. 11/2017-Central Tax (Rate) deals
with composite supply of works contract of a civil structure or any other original
works meant predominately for use other than for commerce, industry, or any
other business or profession. It is evident that the composite supply of works
contract of a civil structure must result in the creation of immovable property,
which is not happening by any stretch of imagination in the case of the applicant.
Or the composite supply of works contract must be of original works. The Notifi-
cation No. 12/2017-Central Tax (Rate), dated 28-6-2017 defines “original works”
as under :-
“(zs) ”original works” means - all new constructions -
(i) all types of additions and alterations to abandoned or dam-
aged structures on land that are required to make them work-
able.
(ii) erection, commissioning or installation of plant, machinery or
equipment or structures, whether pre-fabricated or otherwise”.
The supply and installation of furniture by the applicant will not cover under
works contract of original works, as it is neither new construction nor it is addi-
tions and alterations to abandoned or damaged structures on land that are re-
quired to make them workable.
Moreover, the applicant’s work does not cover under erection, commis-
sioning or installation of plant, machinery or equipment or structures, whether
pre-fabricated or otherwise.

GST LAW TIMES  27th August 2020  101