Page 103 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] IN RE : METHODEX SYSTEMS PVT. LTD. 429
the State Government, in their letter, dated 28-12-2019 that the supply, installa-
tion and fixing of customized furniture for newly constructed Mantralaya, Val-
labh Bhawan Extension, Bhopal is covered under composite supply of works
contract as defined u/s 2(119) of CGST Act and the rate of tax applicable to the
said supply is 12% as per Notification No. 11/2017-Central Tax (Rate), dated 28-
6-2017 is not legally tenable.
6.7 As per Section 2(30) of CGST Act, “composite supply” means a sup-
ply made by a taxable person to a recipient consisting of two or more taxable sup-
plies of goods or services or both, or any combination thereof, which are naturally
bundled and supplied in conjunction with each other in the ordinary course of
business, one of which is a principal supply.
6.8 As per Section 8(a) of CGST Act, the tax liability on a composite or a
mixed supply shall be determined in the following manner, namely :-
(a) a composite supply comprising two or more supplies, one of which
is a principal supply, shall be treated as a supply of such principal
supply,
(b) ………
6.9 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.
6.10 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.
6.11 As per the view point and interpretation of law and facts of the
case, the supply, installation and fixing of furniture, either customized or not
customized, is not composite supply of works contract by way of construction
etc. of civil structure or other original works to the Government and therefore, is
not chargeable to concessional rate of 12% as per the Notification No. 11/2017,
dated 28-6-2017.
6.12 Having regard to our observations and findings detailed in the
foregoing paras, we conclude that the contract in questions i.e. work order relat-
ing to supply, installation and fixing of customized furniture in a building con-
form to the “COMPOSITE SUPPLY” as provided in Section 2(30) of CGST Act,
2017. The supply made by the applicant to the Capital Project Administration
consists of Two taxable supplies of Goods and Services, which are naturally
bundled and supplied in conjunction with each others, where the supply of
goods viz. Furniture is the principal supply. We thus hold that the work order in
question shall merit classification under Chapter Heading 9403 of GST Tariff and
shall be liable to GST at the rate applicable at the time of supply.
7. Ruling
7.1 The activities of supply, installation and fixing of furniture to be
performed by the applicant cannot be classified under Heading 9954 - Construc-

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