Works Contract to construct IIT, Bhubaneswar to be considered as Composite Supply Contract

In re NBCC (India) Limited (GST AAAR Odisha)

In M/s. NBCC (India) Limited [Order No. 02/ODISHA-AAAR/Appeal/2020-21 dated March 19, 2021], M/s. NBCC (India) Limited (the Appellant) aggrieved by Advance Ruling No. 01/ODISHA-AAR/2020-21 dated October 01, 2020 has sought clarification as to whether works contract executed by them of construction of IIT, Bhubaneswar can be treated as composite supply under Goods and Services Tax (GST).

The Hon’ble Odisha Appellate Authority of Advance Ruling (“OAAAR”) observed that is it clearly stated in the agreement between the Appellant and IIT Bhubaneswar that the Appellant is entrusted with the entire project on turnkey basis for work relating to Planning, designing, and supervision of construction of various building infrastructure development and interior work, etc.

Such a turnkey project is a “works contract” as per Section 2(119) of the Central Goods and Services Tax Act, 2017 (“CGST Act”). The same is to be treated as composite supply under Section 2(30) of the CGST Act.

Noted, that Composite supply works contract is treated as a “supply of service” under Schedule II Para 6 of the CGST Act. OAAAR, therefore was not inclined to accept the decision provided in Advance Ruling No. 01/ODISHA-AAR/2020-21.

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