Page 62 - CA Final GST

Badlani Classes

2- Works contract in relation to immovable property is deemed service
Works contract as defined under Section 2(119) is deemed to be service under
para 6(a) of Schedule II to the Central Goods and Services Tax (CGST) Act, 2017,
despite being a composite supply.

Works contract concept exists only for immovable property- No concept of
works contract in relation to goods

3- Construction service As per Para 5(b) of Schedule II of CGST Act, 2017,
construction of a complex, building civil structure or a part thereof, including a
complex or building intended for sale to a buyer, wholly or partly, except where
the entire consideration has been received after issuance of completion
certificate, where required, by the competent authority or after its first occupation,
whichever is earlier.

Explanation:
➢ “Competent authority” means the Government or any authority authorized to
issue completion certificate under any law for the time being in force and in case
of non-requirement of such certificate from such authority, from any of the
following , namely;-
(i) an architect registered with the Council of Architecture constituted under the
Architects Act, 1972; or
(ii) a chartered engineer registered with the Institution of Engineers (India); or
(iii) a licensed surveyor of the respective local body of the city or town or village
or development or planning authority;

“Construction” includes additions, alterations, replacements or remodeling of any
existing civil structure;

Certain cases:
Case Whether “Works Contract”?
Labour contracts in relation to a No. For works contract, there should be transfer
building or structure of property in goods involved in execution of
such contract. Pure labour contracts are not
works contract.
Contracts for repair or maintenance Yes. Contracts for repair or maintenance of
of road immovable properties are also works contracts
if property in goods is transferred in the course
of execution of such a contract.
Contracts for construction of a Yes. As pipeline or conduits are structures on
pipeline or conduit land, contracts for construction of such
structure are works contract.
Contracts for erection or installation Sub contracts would be treated works contracts
of plant, machinery, equipment or if-
structure, whether prefabricated or 1- Transfer of property in goods is involved
otherwise in such contract; and
2- Machinery equipment structures are
attached or embedded to earth after
erection or installation, such that they
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become immovable property

Central Goods & Services Tax Act, 2017