GST Rate @ 12% applies on Mixed Supply of Works Contract & Job Work: WB AAR
West Bengal - Authority of Advance Ruling directed that 12 per cent GST Rate be extended to a mixed supply of works and job work contracts.
The applicant is the owner of M/s Vrinda Engineers Private Limited and provides the construction of the site structure, the equipment for the railway bridge, the technical structure, the blast furnace shell, and the civil structure. The applicant also works, including design and material jobs, for another registered person.
The applicant seeks an advance ruling on the given rate of tax relevant to Sl No. 26 of Goods & Services Tax Notification No. 11/2017 Central Tax (Rate) dated 28 June 2017. Which is revised from time to time,
The 2 judges Parthsarthi Dey & Sushmita Bhattacharya declare that the actions of the petitioner could be part of the fabrication work on material given by the petitioner and delivery. The supply of paint for the fabricated structure as well as a work contract consisting of the application for the withstanding structure for the paint coat including the immovable property maintenance.
Authority of Advance Ruling sees that there are 2 things written about the contract: the job work of producing steel structures and the on-site supply of sudden supplies of paint, along with the work of the contract to sustain the steel structure post.
Authority for Advance Ruling held that the applicant had supplied a combination of supplies consisting of the manufacture of steel and paint to the erected steel structures & these are subject to tax @ 12 percentage under the provisions of Section 8(b) of the Goods & Services Tax Act.
What is a supply under Goods & Services Tax Act?
The term "supply" basically applies to all types of supply of goods/services. It shall be considered throughout the course of business and shall contain the following:
• Barter
• Rental
• Sale
• Lease
• License
• Transfer of funds
• Exchange
• Disposal
• Importing services for consideration (if even it is not in the course or furtherance of business)
Few kinds of activities mentioned in Schedule I of the GST Act will also be considered as supplies.
Why is the principle of mixed supply and composite supply crucial?
Relevant rates for goods and services have been defined by the Good & Services Tax Council. The Goods & Services Tax rate for each category of goods and services has been classified in the Goods & Services Tax Act. So if you supply a specific good or service rate, it's easy to recognize. However, often the Supply of goods and services may be linked, or maybe done together, even though they are not connected. For instance, An Air Conditioners is supplied and Air Conditioner Installation services are also provided along with it. The Goods & Services Tax Act specifies how this supply is to be rated.
However, the Principle of composite supply & mixed supply becomes relevant. It helps to assess the correct Goods & Services Tax rate and ensures uniform Goods & Services Tax treatment for such supplies.
Time of supply - composite supply:
If the main supply is a service (for eg, Food on board and Air transport) then the composite supply would be regarded as a supply of services. The provisions relating to the Time of Supply of services shall apply.
Comparably, in the case of the purchasing and transport of goods, the primary supply is the supply of goods. Composite supplies shall qualify as supplies of goods & the provisions relating to the time of supply of goods shall apply.
Time of supply: Mixed supplies
If the maximum tax rate pertains to a service, then a mixed supply will be considered as a supply of services. The GST related provisions relating to the Time of supply of services will apply.
Comparably, if the maximum tax rate pertains to goods, then the mixed supply will be considered as a supply of goods. The provisions relating to the Time of supply of services will apply.
Note :
Goods and services tax : Not filling the certified copy of order appealed against within seven days of filing of appeal with Goods and services tax department is a mere technical defect.
{Case Name : Atlas Pvc Pipes Limited Vs State of Odisha (Orissa High Court) Appeal Number - Date of Judgement/Order : 29/06/2022}
