Page 28 - Chapter 2.cdr

Therefore, the given supply of items is an inter-State supply as the location of the plants that are in the nature of immovable property and uses consumables and
supplier and the place of supply are in two different States [Section 7(1)(a) of parts, wherever necessary, for the repairs. Hence, the contract is that of a works
CH 2 IGST Act, 2017]. Thus, the nature of supply falls under section 5(1) of the IGST contract.
Act, 2017. As per section 2(30) of the CGST Act, 2017, a works contract is a 'composite
Charge of Tax & Concept of Supply
2) As per section 25(4) of the CGST Act, 2017, a person who has obtained more supply'. The composite supply of works contract is classified as supply of service
than one registration, whether in one State or Union territory or more than one in terms of para 6(a) of Schedule II to the CGST Act, 2017.

State or Union territory shall, in respect of each such registration, be treated as The value of the items actually used in the repairs will be included in the invoice
'distinct persons'. raised for the service and will be charged to tax at that point of time.
As per Schedule I to the CGST Act, 2017 specifies situations where activities are 5) As per section 8(a) of the CGST Act, 2017, a composite supply is treated as a
to be treated as supply even if made without consideration. Supply of goods supply of the principal supply involved therein and charged to tax accordingly.
and/or services between 'distinct persons' as specified in section 25 of the The activity is a composite supply of works contract, which is treated as supply

CGST Act, 2017, when made in the course or furtherance of business is one of service.
such activity included in Schedule I under para 2. 6) In the given case-
However, As per the GST Council's recommendation, it has been clarified that the location of the supplier is in Bangalore (Karnataka); and
the inter-State movement of various modes of conveyance between 'distinct
the place of supply of works contract services is Tamil Nadu in terms of section
persons' as specified in section 25(4), not involving further supply of such 12(3)(a) of the IGST Act, 2017.
conveyance, including trucks carrying goods or passengers or both; or for
Therefore, the given supply is an inter-State supply as the location of the supplier
repairs and maintenance, may be treated 'neither as a supply of goods nor and the place of supply are in two different States [Section 7(1)(a) of IGST

supply of service' and therefore, will not be leviable to IGST.
Act, 2017]. Thus, the supply will be leviable to IGST in terms of section 5(1) of
As per Circular No. 1/1/2017 IGST dated 07.07.2017 applicable CGST/SGST/IGST,
the IGST Act, 2017.
however, shall be leviable on repairs and maintenance done for such conveyance 7) In the given case, the location of the supplier and the place of supply of works
3) With reference to the above provision pertaining to distinct person in this case, contract services are within the same State. Therefore, the given supply is an
stand-alone machine and container truck are moved to client location and not intra- State supply in terms of section 8(1) of IGST Act, 2017 and thus,

between 'distinct persons'. Hence, the same will fall outside the scope of chargeable to CGST and SGST.
definition of supply and will not be leviable to GST
4) As per section 2(119) of the CGST Act, 2017, 'works contract' means a contract
for, inter alia, repair, maintenance 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.

In this case, the supplier provides maintenance and repair services for power

www.vsmartacademy.com
36 CA VISHAL BHATTAD 09850850800 V’Smart Academy
CA Final GST Questioner