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The supply of goods and service by the applicant to Cray Inc. (Cray) does not qualify as ‘works contract’ as defined under Section 2(19) of CGST Act

Classification of Supply The question before us is whether supply of goods and services by the applicant to M/s Cray Inc. (Cray) qualify as ‘works contract’ as defined under Section 2(119) of the CGST Act?

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 Date 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 installation of equipment within the Data Centre and becomes a part of such data Centre 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.

The jurisdictional officer has submitted that, on going through the list of goods and services. it is seen that items are in nature of machine/instruments/equipment and are all replaceable and hence cannot he said to be of ‘immovable’ nature.

Held that— We agree with these submissions of the jurisdictional officer and for reasons mentioned in the aforesaid paras we hold that the supply of goods and service by the applicant to Cray Inc. (Cray) does not qualify as ‘works contract’ as defined under Section 2(119) of the Central Goods and Services Tax Act, 2017—Prasa Infocom & Power Solutions Private Limited, In Re.. [2020] 22 TAXLOK.COM 148 (AAR-Maharashtra)