GST Implications: High Seas Sale Goods Value Must Be Included in Works Contract Under Section 15 CGST

The AAR ruled on GST implications in an EPC contract between the applicant and IOCL. The contract was determined to be a single, composite works contract rather than a divisible one, despite comprising two work orders. The high seas sale (HSS) transaction was deemed neither a supply of goods nor services under Schedule III of CGST Act. However, the value of imported goods sold on HSS basis must be included in the transaction value for GST computation on works contract services, as per Section 15 of CGST Act. The ruling established that subsequent incorporation of HSS goods into works contract constitutes a composite supply treated as service under Schedule II. The contract's taxation involves both customs duty at importation and GST on the composite works contract service. .....

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