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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 ..... s and also the service of installation. The service of installation is possible only when the goods (submersible pump sets) are supplied and hence the pre-dominant supply is that of Submersible Pump Sets and hence the principal supply in this case is supply of goods i.e. Submersible Pump Sets - Therefore the instant supply squarely falls under the definition of Composite Supply . Works Contract or not - HELD THAT:- The recipient (Corporation) prepares the bore wells on their own account. The applicant is not concerned with the same. Bore well is a hole dug in the ground, which enables the underground water to be brought to the surface by means of a pump, The applicant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling on the following question: The applicable rate of GST for the manufacture and supply of submersible pump sets and accessories with installation, 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 imple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited are owned by Government of Karnataka, stated that the receiver/ s are appearing in the Government of Karnataka portal and also submitted the copies of the Certificate of Incorporation and other documents to the effect that they 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 numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Union Territory or a local authority. 10.4 It is apparent that the corporations, M/s. Dr. B.R. Ambedkar Development Corporation Limited, Schedule Tribes Welfare Department, M/s. Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited and M/s. D. Devaraj Urs Backward Classes Development Corporation 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. The following two points emerge from the aforementioned definition of Works Contract : i. The agreement/contract the relevant supply must be for building, construction, fabrication, completion, 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 agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , It is, thus, evident that the cost of goods is 86.90% and that of services of erection, installation etc. is 13.10% of the total cost. 10.12 The salient features of the agreement, as discussed above, indicate that the applicant is not involved in the activity of drilling bore wells. The recipient (Corporation) prepares the bore wells on their own account. The applicant is not concerned with the same. Bore well is a hole dug in the ground, which enables the underground water to be brought to the surface by means of a pump, The applicant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion. The copy of the said ruling as submitted by the applicant has been examined. The question raised before the authority in Rajasthan was whether the activity of supply, design, installation, commissioning and testing of solar energy based water pumping systems supply of goods or supply of services and what shall be the rate of GST on it? . The scope of work in this case covers design, supply, install, test and commission of solar based water pumping systems along with construction of housing structure for this plant and all necessary works for operation of such work and accordingly it was held by the said authority that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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