Supply, installation & fixing of furniture cannot be a works contract

In re Methodex System Pvt. Ltd. (GST AAR Madhya Pradesh)

The supply, installation and fixing of furniture, customized or customized cannot be a works contract, as the items of furniture have been made or manufactured at the supplier’s place which have been installed or fixed at the place of the recipient. Such installed or fixed items of furniture can be removed/ moved to any place without damage to the furniture. Thus, supply, installation and fixing of furniture cannot be covered under works contract, as it does not result in immovable property or it is not going to be part of immovable property.

As per the view point and interpretation of law and facts of the case, the supply, installation and fixing of furniture, either customized or not customized, is not composite supply of works contract by way of construction etc of civil structure or other original works to the Government and therefore, is not chargeable to concessional rate of 12% as per the Notification No. 11/2017 dated, 28.06.2017.

Having regard to our observations and findings detailed in the foregoing paras, we conclude that the contract in questions i.e. work order relating to supply, installation & fixing of customized furniture in a building conform to the “COMPOSITE SUPPLY” as provided in section 2(30) of CGST Act, 2017. The supply made by the applicant to the Capital Project Administration consists of Two taxable supplies of Goods and Services,. which are naturally bundled and supplied in conjunction with each others, where the supply of goods viz. Furniture is the principal supply. We thus hold that the work order in question shall merit classification under Chapter Head 9403 of GST Tariff and shall be liable to GST at the rate applicable at the time of supply.

FULL TEXT OF ORDER OF THE AUTHORITY OF ADVANCE RULING, MADHYA PRADESH

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