GST on Contract for Supply & Installation of Oxygen Tank, Goods and Services Tax - GST

[ROHIT GOEL]

Dear experts,

One of our clients is engaged in business of Supply and Installation of Oxygen Tanks at various Hospital sites. As part of the contract, they get the Tank made and transport tank to customer site. There they perform civil work, build Concrete foundations and thereafter tank is attached to earth. However as per nature of the tank, it can be detached from earth after destroying the foundations and as it is can be deployed at any other site by building new foundations there.

The question is whether such tank can be called an immovable property and thus whether the contract can be called works contract u/s 2(119) of CGST Act or it would be composite supply where principal supply will be Supply of Tank.

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

Under GST law taxable event is the supply of goods. Immovable property is liable to excise duty under erstwhile Central Excise law. In my opinion, since you are transferring the property in goods (tank) and also undertake installation of the same for storing oxygen it is liable to gst under works contract service.

[Shilpi Jain]

Since the tank can be moved without damage, it would not be an immovable property any hence not a works contract. Decision of SC in the case of Solid and correct would be relevant in this case.

[KASTURI SETHI]

In this scenario, oxygen tank cannot be treated as immovable property. Hence out of definition of 'works contract'

[ABHISHEK TRIPATHI]

Dear Rohit Ji,

If you say and establish that it is attached to earth then only it will fall under the immovable property. I remember if the annexation is strong and hard to remove (like you say have to break the concrete) and the purpose while fitting, and other factors (can't remember now) all these ingredients make it immovable. Prima facie to me seems more immovable than movable. Refer TP, General Clauses and judgments for further clarity.

[KASTURI SETHI]

Dear Sir,

Pl. mention complete citation.

[Shilpi Jain]

Yes. These were cases before solid and correct came in. But with solid and correct being delivered the position will have to be seen in that context.

So the intention of the erection should not drive its Immovability but whether it is capable of being moved without damage should be considered