Contract with MP Power Generating Co. Ltd. not a composite supply for concessional GST rate determination.

The Authority determined that the contract between the applicant and MP Power Generating Company Ltd. did not qualify as a composite supply eligible for the concessional GST rate. Each supply under the contract would be taxed individually based on its classification and applicable rate. The ruling clarified the classification of the contract, the eligibility for concessional rates, and the tax treatment of individual supplies, emphasizing that only works falling within the scope entrusted by the Government of Madhya Pradesh to MP Power Generating Company Ltd. would be entitled to the concessional rate.

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Issues:
Classification of work as composite or separate contract, effective rate of tax.

Analysis:
1. The applicant, a company registered under The Companies Act, filed an application under Section 97 of the Central Goods & Services Tax Act, 2017 and MP Goods & Services Tax Act, 2017, seeking clarification on the nature of the contract undertaken with MP Power Generating Company Ltd.

2. The Concerned Officer opined that the tender document constituted a consolidated contract, chargeable to tax as a composite supply under SAC 9954, not eligible for concessional GST rate of 12%. The rate of tax would be based on the nature of the work done.

3. During the personal hearing, the applicant argued that the work order was for a consolidated contract, invoiced on a consolidated basis, and should be considered a composite supply. The applicant claimed that the work was being supplied to a Government entity, MP Power Generating Company Ltd., entitling it to the concessional GST rate.

4. The Authority considered the tender document, which detailed individual works with specific remunerations, and concluded that the works were not naturally bundled for classification as a composite supply. The Authority also noted that certain works, like a Fitness Centre cum Gym, did not align with essential works entrusted by the State Government to MP Power Generating Company Ltd.

5. It was established that MP Power Generating Company Ltd. qualified as a Government Entity, meeting the conditions under Notification No.11/2017-CT(R). However, the Authority ruled that the entire work under the contract did not qualify as a composite supply eligible for the concessional GST rate. Only supplies falling within the scope of work entrusted by the Government of Madhya Pradesh to MP Power Generating Company Ltd. would be entitled to the concessional rate.

6. The ruling declared that each supply under the contract would be chargeable to tax individually, based on its classification and applicable tax rate. The ruling was valid unless declared void under the GST Act.

7. The judgment clarified the classification of the contract, the eligibility for concessional GST rates, and the tax treatment of individual supplies under the contract, providing a detailed analysis of the applicant's contentions and legal provisions.

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