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96 GST LAW TIMES [ Vol. 40
make a mention of any amounts to be charged towards Annual Maintenance
Services to be rendered by the applicant.
5.4 Applicant has submitted that the subject activity undertaken by
them involves creation of an immovable property and therefore qualifies as a
supply of works contract liable to GST @ 18%. The questions raised by the appli-
cant is with respect to a Data Center project awarded to them by Cray for supply
of various equipment along with installation, testing and commissioning thereof
at site. The applicant has further submitted that the scope of the work involves
complete design of data Centre, supply of equipment, transport and delivery to
sites, training, installation, testing and commissioning of such equipment. They
have further submitted that maintenance of the Data Centre for further period of
three years are also being undertaken by them. It is seen from the documents
submitted by them that, separate prices are indicated for each of the activity for
supply of various materials and the activity for installation, testing & commis-
sioning, maintenance, etc. Since the agreement was entered prior to the introduc-
tion of GST, they have, in their documents, shown levy of Value Added Tax
(VAT)/Central Sales Tax (CST) and Service Tax.
5.5 Since the applicant is claiming that the subject activities undertaken
by them amounts to Works Contract as per GST Laws, we shall therefore discuss
all the provisions relating to Works Contract. GST Schedule II clearly mentions
that the following are supply of services :-
(a) construction of a complex, building, civil structure or a part thereof,
including a complex or building intended for sale to a buyer, wholly
or partly,
(b) works contract including transfer of property in goods (whether as
goods or in some other form) involved in the execution of a works
contract
Hence Works contract will be treated as service and tax would be charged ac-
cordingly. As per Section 2(119) of the CGST Act, 2017, unless the context other-
wise requires, the term “works contract” means a contract for building, construction,
fabrication, completion, erection, installation, fitting out, improvement, modification,
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 in-
volved in the execution of such contract.
5.5.1 Thus what we need to find out is whether the applicant in the
subject case is dealing in any immovable property which is transferred in the
execution of the contract. The applicant has submitted that as per their contracts
with Cray, the final outcome or deliverable is ready to operate Data Centre. Their
contention is that the installed equipment cannot be dismantled and removed
after installation, without damage. Hence it is in the nature of permanent instal-
lation of equipment within the Data Centre and becomes a part of such data Cen-
tre and therefore inherits the characteristics of an “immovable property” and
therefore their transaction is a transaction of “works contract”, covered under
Section 2(119) of the Act.
5.5.2 The documents submitted by the applicant reveal that the contract
pricing is different for Equipment/Materials, their Installation and Maintenance.
For goods supplied, the prices are shown exclusive of VAT/CST and for services
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