Supply of goods and services through separate agreements will not be considered as composite supply

In re PES Engineers Pvt Ltd (GST AAR Telangana)

In a recent ruling by AAR Telangana in the case of M/s. PES Engineers Pvt. Ltd. [TSAAR Order No. 09/2023 dated April 13, 2023], held that when parties enter into separate agreements for goods and works contract services, they are treated as distinct supplies and not composite supply. Accordingly, if any advance is received for supply of goods, that will be taxed as per Section 12(2)(a) of the Central Goods and Services Tax Act, 2017

Facts:

M/s. PES Engineers Pvt. Ltd. (“the Applicant”) is engaged in the business of construction and maintenance of various types of power projects.

The Applicant is awarded with a contract by M/s. Singarenni Collieries Company Ltd. (“SCCL”) vide bid notifications dated December 28, 2021.

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