GST on construction service provided to IIT, Bhubaneswar.
Works contract- In the instant case, there are number of works entrusted to the applicant under a single contract/agreement. IIT, Bhubaneswar has engaged the applicant as a “Project Management Consultant”.
The applicant has awarded different types of works to various agencies/contractors with categorical mention of individual works to be carried out by them with specific remuneration for each such work. Hence, it is a supply having distinctly identifiable components with distinct value attributable to each of the components. We, however, do not agree with the contention of the applicant for the reasons that the items covered under the ‘Scope of Work’ are disjoint in character and can be supplied in conjunction with each other in the ordinary course of business. Hence, we are unable to subscribe to the views of the applicant that the supply of services and goods encompassed in the subject work order/contract are naturally bundled. Mere fact that a number of tasks have been entrusted to the applicant would not make it entitled to be categorized as ‘composite supply’ particularly in terms of Section 2(30) of the CGST Act, 2017.
we find that the applicant has been engaged as a PMC to execute the contract for carrying out different specified works for IIT, Bhubaneswar which includes erection, commissioning, installation, etc. We also find that for executing the project, the applicant shall be paid agency charges of 5.5% in addition to the actual cost of work. The agency charges are type of commission or remuneration for rendering ‘consulting service’ to IIT, Bhubaneswar. We also find it necessary to place on record that there are certain items of supply made to IIT , Bhubaneswar including, but not limited to, ‘supply of consulting services’ which definitely do not find place in the ambit of Sr. No. 3(vi) to the Notification No. 11/2017-C.T. (Rate).Needless to mention that such supply shall not qualify for exemption as envisaged under Sr. No. 3 (vi) to the Notification No. 11/2017-C.T. (Rate), inasmuch as the said supply is a “ Pure Service” and not in the nature of works contract service.
Held that- we hold that construction of Directors Bungalow and construction of staff/faculty quarters is out of purview of exemption provided under Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 and would attract GST @ 18% (9% CGST + 9% SGST).
GST on construction service provided to IIT, Bhubaneswar.
Works contract- In the instant case, there are number of works entrusted to the applicant under a single contract/agreement. IIT, Bhubaneswar has engaged the applicant as a “Project Management Consultant”.
The applicant has awarded different types of works to various agencies/contractors with categorical mention of individual works to be carried out by them with specific remuneration for each such work. Hence, it is a supply having distinctly identifiable components with distinct value attributable to each of the components. We, however, do not agree with the contention of the applicant for the reasons that the items covered under the ‘Scope of Work’ are disjoint in character and can be supplied in conjunction with each other in the ordinary course of business. Hence, we are unable to subscribe to the views of the applicant that the supply of services and goods encompassed in the subject work order/contract are naturally bundled. Mere fact that a number of tasks have been entrusted to the applicant would not make it entitled to be categorized as ‘composite supply’ particularly in terms of Section 2(30) of the CGST Act, 2017.
we find that the applicant has been engaged as a PMC to execute the contract for carrying out different specified works for IIT, Bhubaneswar which includes erection, commissioning, installation, etc. We also find that for executing the project, the applicant shall be paid agency charges of 5.5% in addition to the actual cost of work. The agency charges are type of commission or remuneration for rendering ‘consulting service’ to IIT, Bhubaneswar. We also find it necessary to place on record that there are certain items of supply made to IIT , Bhubaneswar including, but not limited to, ‘supply of consulting services’ which definitely do not find place in the ambit of Sr. No. 3(vi) to the Notification No. 11/2017-C.T. (Rate).Needless to mention that such supply shall not qualify for exemption as envisaged under Sr. No. 3 (vi) to the Notification No. 11/2017-C.T. (Rate), inasmuch as the said supply is a “ Pure Service” and not in the nature of works contract service.
Held that- we hold that construction of Directors Bungalow and construction of staff/faculty quarters is out of purview of exemption provided under Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 and would attract GST @ 18% (9% CGST + 9% SGST).