Supply and Installation of Electric Overhead Travelling Crane - a works contract or Supply of goods?, Goods and Services Tax - GST

[Shyam Agarwal]

Query is regarding Combined contract for Supply and Installation of Electric Overhead Travelling Crane. Whether the same should be considered as a works contract under GST or supply of Goods that is Crane.

As per recent Advance Rulling of Maharashtra - In case of M/s Mukund Ltd-GST AAR Maharashtra = 2018 (10) TMI 1243 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA , it is held that EOT Grab Cranes r liable for GST@5% as these are used for waste to energy product as a Renewable Energy. In this it was also discussed that Electric Overhead Travelling Grab Crane attached to the fixed support classifiable under Tariff heading 84261100.Is it mean that AAR held EOT Cranes as a goods? But after Installation the same should be considered as a works contract. Please share your analysis on the same.

Whether Combined contract for Supply and Installation of Electric Overhead Travelling Crane is to be considered as a works contract under or supply of goods under chapter heading 84261100?

Posts / Replies

[DR.MARIAPPAN GOVINDARAJAN]

In my view it will be a supply and not a works contract.

[Shyam Agarwal]

Thanks Sir for your reply. But these kind of cranes are installed on Gantry Beams on which they run. Further, Gantry Beams are attached to walls of Building. Thus, intention to install EOT Cranes are Permanent in nature and without proper Installation these kind of cranes are not workable. Thus it fullfills criterias to become Immovable property as per various advance rulings given recently. Like in Car parking systems and Solar power Projects. Therefore, please sir elaborate your valuable suggestions for treating these cranes as Supply of goods and not works contract. Please suggest

[KASTURI SETHI]

In my view, it is a works contract.

[Shyam Agarwal]

Will your reply differ if gantry beam over which EOT Cranes run is already affixed by client himself with his structure (actually building design itself require some specification if there will be Installation of Electronic Overhead Travelling Crane) and we supply the EOT Crane and install the same on Gantry Beams which is already affixed by client and we do only supply, install and Commissioning the crane.

[Vamsi Krishna]

Under GST laws, the definition of “Works Contract” has been restricted to any work undertaken for an “Immovable Property” unlike the existing VAT and Service Tax provisions where works contracts for movable properties were also considered.

The Works Contracts has been defined in Section 2(119) of the CGST Act, 2017 as “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.”

In this case Crane being Movable property, the supply and installation of the same do not fall under Works Contract Service.

I request other Experts to correct me if i am wrong.

Thanks

Vamsi Krishna.N

[Shyam Agarwal]

Thanks Sir for your valuable suggestions but after Installation Is it becomes a Immovable property where intention of permanancy is there and Can not be moved without dismantling further proper Installation also required for desired functioning. Please suggest in two of the cases 1. Supply and Installation of Electric Overhead Travelling Crane with Gantry beams (of which supply and fixing in our scope) and 2.Supply and Installation of Electric Overhead Travelling Crane without Gantry Beams (which is affixed by customer) our work is only to install EOT Crane on the Gantry Beams.

[Ganeshan Kalyani]

In my view, it is works contract service. The definition of works contract service is clear.

[Ganeshan Kalyani]

In re. ‘Precision Automation And Robotics India Limited’ - 2018 (9) TMI 1106 - AAR, Maharashtra

[Shyam Agarwal]

Thanks Sir for your reply please also clear 2nd issue where in Gantry Beams which is attached to Building is in the scope of customer and our scope is to supply the EOT Crane and install the same on the pre fabricated Gantry beams where in the wheels of the EOT Cranes are installed so that they can run and Complete Commissioning of the same then still it remains works contract..

[Ganeshan Kalyani]

I will compare this with lift. In case of lift the final assembling of the lift parts happens at customer sight. This falls under works contract service. Similar would be the case of yours.

[kollengode venkitaraman]

IT WILL BE A SUPPLY OF GOODS AS THE GANTRY BAR IS MOVABLE. THE EOT CRANE CAN BE DISMANTLED WITHOUT DAMAGE AND REINSTALLED ELSEWHERE. IT IS ONLY MOVABLE PROPERTY AND HENCE SUPPLY OF GOODS.

[KASTURI SETHI]

Dear Sir,. Pl.give comments on the decision of Advance Ruling Authority posted by Sh.Ganeshan Kalyani Ji.