Are you confused in deciding the composite and Mixed Supply then this case study is for you.
ARG Electricals Pvt. Ltd. (AAR – RAJASTHAN)
Applicant : Private Limited Company
Question :
- Determination of the liability to pay tax on any goods/services or both?
- Qualify as works contract?
- Rate of GST?
Fact : AVVNL issues Tender for supply of material/equipment for providing of rural electrically infrastructure for Household electrification in selected blocks & Erection testing & commissioning supplied material/equipment.
Submission : Taxpayer Said that after installation Supply contributes as immovable property. As per Notification No. 1/2018 Dated 25/01/2018 If any supply of work contract to C.G/S.G/Government agency/UT/Local authority/Government authority. Then rate of GST will be @12% instead of 18% from 25/01/2018.Hence taxpayer says rate of GST will be @12%
Finding : Composite supply Supply of material/ equipment including supply of erection & commissioning.
Applicable Rate : Above works contract service is not covered under Entry no. 3(vi)(a) of Notification No. 11/2017 dated 20/06/2017 hence not eligible for lower tax rate hence chargeable @ 18%.
