Integrated plant installation treated as works contract service where assembled system became immovable after commissioning.

Under GST, supply of a functional cattle feed plant with erection, installation and commissioning was treated as works contract service because the plant formed an integrated system fixed at site with foundations, cabling and allied works, and could not be moved without dismantling. The immovable character of the assembled plant satisfied the statutory test for works contract, so the arrangement was not accepted as a separate composite supply of goods with incidental installation services.

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Issues: Whether the supply of a functional cattle feed plant, including erection, installation and commissioning with related works, constitutes a composite supply or a works contract service, and the applicable GST classification and rate.

Analysis: The supply was examined on the basis of the nature of the installed plant, the manner of erection and commissioning, and whether the assembled plant retained movability. The plant was found to be a fully integrated system whose machines, equipment, cabling, foundations and allied works were installed at site in a manner that satisfied the test of permanency. Once erected and commissioned, the plant could not be moved without dismantling, and therefore it was treated as immovable property. On that footing, the arrangement answered the statutory definition of works contract, and the composite-supply argument was not accepted for separate treatment as a mere supply of goods with incidental services.

Conclusion: The supply of the functional cattle feed plant inclusive of erection, installation and commissioning was held to be works contract service and not a separate composite supply of goods with installation services.

Ratio Decidendi: A contract for supply, erection, installation and commissioning of an integrated plant that, once assembled, becomes immovable and cannot be shifted without dismantling constitutes works contract service.

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