In re Tvl. Teemage Builders Private Limited (GST AAR Tamilnadu)
The Authority for Advance Ruling, Tamil Nadu, examined an application filed by a registered entity engaged in precast concrete construction. The applicant manufactures precast concrete structures such as beams, columns, slabs, panels and staircases at its factory in Tirupur and transports them to construction sites across India, where they are assembled into commercial buildings using mechanised processes. No actual construction activity is carried out at the customer’s site other than assembly, and only a small number of employees are stationed temporarily at such sites. The contracts entered into are composite works contracts covering manufacture, transportation and erection of precast structures for a single consolidated value.
The applicant sought advance ruling on eleven questions broadly relating to registration requirements, determination of “fixed establishment”, taxability of movement of goods without consideration, and procedural issues such as invoicing, delivery challans, e-way bills and documentation for movement of machinery and tools. The Authority first examined the admissibility of each question under Section 97(2) of the CGST Act, 2017.
On the issue of registration in other States, the Authority analysed the definition of “fixed establishment” under Section 2(50) of the CGST Act. It observed that the applicant deploys human and technical resources at construction sites in other States for a period of about 150 days and undertakes systematic assembly of precast structures. This degree of permanence and use of resources was held sufficient to constitute a fixed establishment. Consequently, the Authority ruled that the applicant is required to obtain GST registration in the State where the construction site is located, even though the office at site is temporary and the land does not belong to the applicant.
