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TMI Blog2019 (8) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... llation, electrification and energisation under Ganga Kalyana scheme to Social Welfare departments of Government of Karnataka meant for various beneficiaries farmers) as notified by the departments and they also provide guarantee and maintenance of installed submersible pump sets till 2 years which is used for irrigational purposes, 3. The applicant furnishes some facts relevant to the stated activity.' a. The applicant is engaged in manufacturing and supply of submersible. pump sets & accessories along with the installation, electrification and energisation of the said pump sets in the ready drilled bore wells. b. The applicant has been awarded contract, under Ganga Kalyana Scheme by M/s. Dr. B.R. Ambedkar Development Corporation Limited, Schedule Tribes Welfare Department, M/s. Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited, M/s. D. Devaraj Urs Backward Classes Development Corporation Limited, M/S Karnataka Minorities Development Corporation Limited and other implementing agencies, under Social Welfare Department, Government of Karnataka, for supply of submersible pump sets & accessories along with installation, electrification and energis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey are Government Entities. 8. The Applicant contends that they have been awarded contract works by the said government entities under Social Welfare Department, Government of Karnataka for providing the composite supply of service for irrigation purpose to small and marginal land owners of Schedule Caste/ Schedule Tribe/ Other backward class, farmers of economic weaker section, for Agriculture purpose. 9. In this regard it was stated that The Karnataka Schedules Castes and Tribes Development Corporation Limited had been incorporated under Companies Act 1956, vide number 2755 dated 20-03-1975. Later the name of the company was changed to Dr. B.R. Ambedkar Development Corporation Limited. Similarly, The Karnataka Scheduled Tribes Development Corporation Limited was incorporated under Companies Act 1956, on 26-07-2006 and D. Devaraj Urs Backward Classes Development Corporation Limited was incorporated under Companies Act 1956, vide number 003237 dated 28-10-1977 and M/s. Karnataka Minorities Development Corporation Limited was incorporated under Companies Act 1956, vide number 007460 dated 07-02-1986 with the main object to extend irrigation facility to the small and marginal fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Limited and M/S Karnataka Minorities Development Corporation Limited were established by the Government of Karnataka with 100% share capital and control to carry out certain functions of the nature of public welfare envisaged by the State Government. Hence the aforesaid Corporations are covered under the definition of "Government Entity" as provided in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. 10.5 In the context of the aforesaid supply and the applicant's views, the question before us to decide is whether the activity is a composite supply of works contract by way of construction/ erection/ commissioning/ installation/ completion/ fitting out/ maintenance of other irrigation works. 10.6 We proceed to examine whether the supply of the applicant amounts to "Composite Supply" or not. "Composite Supply" is defined under Section 2(30) of CGST Act 2017 which is appended below: "composite supply b means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary Course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erection, installation, fitting out, improvement) modification, repair, maintenance, renovation, alteration or commissioning of any immovable property. ii. The supply must involve transfer of property in goods (whether as goods or in some other form) in the execution of the said contract. 10.10 In order to examine the fulfillment of these requirements it is imperative to examine the contract / agreement under which the supplies are made. The applicant has stated that they had been awarded contract works by Various government entities as mentioned in Para 7 above. They have submitted copy of one agreement/contract entered with M/s. Dr. B.R. Ambedkar Development Corporation Limited. Copies of other agreements/contracts have not been submitted. Therefore this Ruling is on the basis of the terms and conditions mentioned in the agreement/contract with Dr. B.R, Ambedkar Development Corporation Limited, Bellary. Therefore this Ruling shall not be valid for any agreements/ contracts with other agencies in case the terms and conditions differ. The contract is for supply of submersible pump sets and accessories and also for installation, electrification and energisation of the same in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has obligation to supply, install, electrify & energise the submersible pump sets and thereby makes the pump sets functional. The obligation on the applicant is in relation to the effective installation and functioning of the goods supplied by them. The contract governing their supplies does not relate to building, construction, fabrication etc of any immovable property, as envisaged in the definition of works contract. Their supplies (the submersible pumps) are in the nature of movable property. Hence the said activity is not related to the immovable property at any point of the time and hence the said activity does not qualify to be a "Works Contract". 10.13 Notification No.11/2017-Central Tax (Rate) dated 28-06-2017, as amended by Notification No.20/2017-CentraI Tax (Rate) dated 22.08.2017 and Notification No.31/2017-Central Tax (Rate) dated 13, 10.2017, stipulates, at sl.no.3 description (iii), that "(iii) Composite supply of works contract as defined in Clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t activity undertaken was in the nature of works contract. This shows that in this case besides the supply of equipment the applicant was also engaged in the construction of immovable property. However in the instant case the applicant is not engaged in the supply of any activity amounting to construction of immovable property, Therefore the ratio of this ruling does not hold any evidentiary value in the instant application. 10.17 In the light of the above discussion, the supplies made by the applicant qualify to be treated as a composite supply. The tax liability on a composite supply is governed by Section 8 of the CGST Act 2017. Accordingly the composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply and the applicable GST rate on the composite supply would be the rate of GST applicable to the principal supply. 11. In view of the foregoing, we rule as follows RULING The Applicant's supply does not qualify as "Works Contract". It is a composite supply wherein the principal supply is that of the supply of goods i.e submersible pumps. The applicable GST rate to the applicant's supply wo ..... 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