Page 148 - GSTL_27th August 2020_Vol 39_Part 4

474 GST LAW TIMES [ Vol. 39
(iii) Pipelines laid outside the factory premises.
5.12 Input Tax Credit provisions thus restrict ITC credit of works con-
tract services for works to be performed on immovable property and also restrict
the credit of construction related activity of immovable property even when con-
struction activity do not fall into the scope of works contract. However, works
contract and construction activity is eligible for Input Tax Credit if done in re-
spect of plant and machinery. Plant and machinery has been specifically defined
as any equipment, apparatus attached to earth by foundation or structural sup-
port used for supply of goods or services. Plant and machinery to specifically
exclude telecom towers, pipelines etc. As per the definition of works contract, the
works contract inter alia include construction of any immovable property where-
in transfer of property in goods (whether as goods or in some other form) is in-
volved in the execution of such contract. On the other hand Construction has
been defined under explanation to Section 17(5)(c) and (d) as reconstruction, re-
pairs, renovation, additions etc. to an immovable property the cost of such work
is capitalised. Thus, Construction activity will not qualify as works contract if
there is no transfer of property in goods involved i.e. the contractor is supplying
service only without any supply of goods. Works contract may or may not be a
construction.
6. For the work in question viz. Lighting for Plant Road, Boundary and
Watch Tower, the Appellant, M/s. NMDC Ltd., (the employer) had entered into
a Contract agreement dated 10-3-2017 with M/s. Bajaj Electricals Ltd., Mumbai
(Contractor), bearing Contract No. HO(Contracts)/NISP/PI/52 to install Light-
ing for Plant tower, Boundary & Watch tower (Package-33) at 3.0 MPTA Inte-
grated Steel Plant at Nagarnar, Chhattisgarh, as M/s. Bajaj Electricals Ltd., the
contractor has valuable and specialized knowledge and expertise for the work
for lighting for plant road, boundary & watch tower.
6.1 It has been categorically specified in the aforesaid Contract agree-
ment that the scope of work shall also include any and all work, supplies and
services for construction and completion of all works as described in Bill of
Quantities and Technical Specification and that the contractor M/s. Bajaj Electri-
cals Ltd., shall also execute all such works which, in the opinion of the Employer
viz. the Appellant M/s. NMDC are require to be executed for the successful
completion of the work and that all such works shall be deemed to have been
included in the contract and further that the Contractor, at his own cost is re-
quired to undertake modifications/re-construction etc. for completion of work
strictly meeting the requirement of Technical Specifications (refer Article 3-Scope
of Work).
6.2 Article 5, relating to Contract price for the aforesaid contract
agreement specifies that the Employer viz. M/s. NMDC hereby agrees to pay to
the Contractor the Total Contract Price in consideration of the completion of the
Works and performance by the Contractor of its obligation under the Contract
and in accordance with the Contract and that the Contract price shall be
INR 19,19,86,000/-. Besides this Article 10 to the impugned contract specifies that
the Contractor shall use such items of steel that are manufactured by SAIL,
RINL, TATA Steel, Essar, Jindal, Ispat etc. confirming to BIS standards and
which are required for execution of all civil and structural work including sheet-
ing, technological structure, piping etc.
6.3 In the price schedule at Appendix-1 to the contract agreement it has
been specifically mentioned that the prices in the contract is inclusive of rates
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