The works contract under the GST should mean only the contracts in relation to immovable property. the fixation of the air conditioner units along with the pipes does not make the air conditioning units a part of the land and as immovable property, therefore does not fall under the definition of ‘works contract’.
Classification of goods-- The appellant has submitted that they have entered into an agreement with Goa State Infrastructure Development Corporation Ltd (GSIDC) for execution ofAdditional Air conditioning work for the New building of Director of Education at Porvorim,Goa/The agreement is dated 21 August 2018, is for supply, installation, testing and commissioning of VRF Indoor & Outdoor Units suitable for R-410 Gas, refrigerant piping with insulation, drain piping with insulation, MS stands, cabling, Additional Refrigerantand associated electrical works etc. Thus, we find that they will be supplying various VRF Indoor and Outdoor units, stands, cables etcwhich will be installed by them. After installation of the said equipment, testing will be conducted to see whether the Air conditioning work has been done properly and after successful testing the commissioning would start.
The AAR has also concluded that this is a composite supply and the principal supply is of goods in the instant case. We agree with the same. The supply of goods and services are conjoint to each other and inter dependent. Moreover, it is an established practice to supply air conditioner units and also provide the installation and therefore it can be construed as naturally bundled and therefore a composite supply, where, needless to say the principal supply is that of goods,which is the air conditioner units. Air Conditioners units fall under Chapter 8415 and are taxable @ 28% and are covered under Schedule IV, Sr no 119 of notification No 01/2017 (CV.T rate) dated 28/06/2017. Hence the principal supply in the composite supply being goods, the appellant is liable to pay GST @ 28% on the whole contract.
Held that- we hold that the contract in the impugned case is though a composite supply not for immovable property, and therefore does not fall under the definition of ‘works contract’ . The principal supply in the case is of Air conditioning units and the entire contract is taxable @ 28%