WORKS CONTRACT DEFINITION :
‘works contract’ means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is
involved in the execution of such contract.”
PRE GST V/S POST GST :
EXAMPLE RELATED TO REPAIRING OF CAR :
1. What is rate of GST 28% or 18% ???
2. This is a composite supply or mixed supply ???
Ans . This is a example of composite Supply and here GST rate chargeable is 18%.
√ Can we bifurcate this into two separate invoices and charge different rate of GST in both of the invoices
√ If bifurcation is allowed then it will create legal dispute , then what is object of composite supply
CIRCULAR NO. 47 DATED 18 JUNE 2018
As per para 6(A) of Schedule – II of CGST Act :
works contract is determine as supply of service only.
PARA 6(A) OF SCHEDULE – II OF CGST ACT 2017
Note : In the above example the contract is concluded as Supply of service.
IN CASE OF SOLAR POWER PENAL
Mr. Mohit has purchased solar power penal along with erection and commissioning also supplier has indeeded with earth
BECOME A IMMOVABLE PROPERTY
Question : This is a supply of goods or works contract ???
LET’S START THE ANALYSIS :
IMPORTANT EXAMPLE :
INPUT TAX CREDIT AND VALUATION IN CASE OF WORKS CONTRACT :
(i) land,building or any other civil structures
(ii) telecommunication towers
(iii) pipelines laid outside the factory premises
LET’S TAKE AN EXAMPLE :
Section 17 (5) clause d : Goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.
If cement, iron and steel is purchased by shyam then can shyam claim ITC on those products ??
LET’S TAKE ANOTHER EXAMPLE :