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Work undertaken by way of supply of material/ equipment and erection, testing & commissioning of supplied material/equipment for rural electrification to AVVNL is though a Composite Supply of Works Contract but the same is not eligible to be taxed at lower rate of 12% and hence are liable to be taxed @18%

Works Contract In the present case, the applicant has been awarded a contract by AVVNL. The tender is regarding supply of and services of erection, testing & commissioning of supplied material to AVVNL under RGGVY scheme on turnkey basis in Dungarpur District of Rajasthan.

Questions on which advance ruling is sought—
Whether the contract entered into as per the work orders combine of supply, erection, testing and commissioning of materials/equipments for providing rural electricity infrastructure qualifies as a supply for work contract under Section 2(119) of CGST Act?

If Yes, whether such supply, erection, testing and commissioning of materials/equipments for providing rural electricity infrastructure made to AWNL would be taxable at the rate of 12%

Held that — The work undertaken by the applicant as per Contract RGGVY/TN-13 entered between the applicant and AWNL along with two Work Orders viz.

(a) Supply of Materials/Equipments and

(b) Erection, Testing and Commissioning of Materials/Equipments (supplied in first work order) in building of rural electricity infrastructure is a Composite supply of Works Contract.

The work undertaken by the applicant as per Contract RGGVY/TN-13 (encompassing both work orders) is a Composite supply of Works Contract and not eligible to be taxed at lower rate of 12% and hence are liable to be taxed @18%.—Arg Electricals Pvt., In Re… [2020] 24 TAXLOK.COM 041 (AAR-Rajasthan)