In re IDMC Limited (GST AAAR Gujarat)
In a recent decision by the Appellate Authority for Advance Ruling (AAAR) in the case of M/s. IDMC Limited, the issue at hand revolved around the classification of the supply of a cattle feed plant under the Goods and Services Tax (GST) regime. The appellant sought clarification on whether the contract, involving the supply of equipment, machinery, erection, installation, and commissioning services with or without civil work for a cattle feed plant, should be considered a composite supply of works contract.
Context and Legal Framework
The appeal was filed under Section 100 of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Gujarat Goods and Services Tax Act, 2017 (GGST Act). The appellant questioned the ruling provided by the Gujarat Authority for Advance Ruling (GAAR) in Advance Ruling No. GUJ/GAAR/R/2022/14 dated 14.03.2022.
Appellant’s Queries
The appellant posed two specific questions:
i. Whether a contract involving the supply of equipment/machinery, erection, installation, and commissioning services without civil work for a cattle feed plant would be considered a composite supply under the GST regime.
ii. Whether a similar contract involving civil work would be considered a works contract service.
Facts Presented by the Appellant
The appellant contended that their supply of a cattle feed plant, with or without civil work, should be treated as a composite supply rather than a works contract. They argued that their agreement focused on the supply and installation of the cattle feed plant, explicitly excluding civil work or services. The appellant referenced their understanding of their case qualifying as composite supplies and relied on previous rulings and legal precedents to support their claim.
GAAR Ruling
The Gujarat Authority for Advance Ruling (GAAR) ruled that the supply of a functional cattle feed plant, including its erection, installation, commissioning, and related works, would be considered a works contract service. The applicable GST rate was determined to be 18%.
Appellant’s Grounds for Appeal
In their appeal, the appellant raised several objections to the GAAR ruling:
