Tailor-made lift supply, erection, commissioning and installation classified as composite works contract under SAC 995466 attracting 18% GST rate.

AAR Kerala ruled that supply, erection, commissioning and installation of tailor-made lifts/elevators by the applicant constitutes composite supply of works contract classifiable under SAC 995466 (lift and escalator installation services). The authority determined this classification as most specific despite client arguments for single residential unit construction services under SAC 995411. The services attract GST at 18% rate regardless of installation location, whether single dwelling, multi-dwelling, multi-storied residential, industrial or commercial buildings.

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Issues involved:
Classification of service provided; Applicability of rate notification 11/2017 Central Tax (Rate)

Classification of service provided:
The applicant, a partnership firm engaged in the supply, erection, commissioning, and installation of elevators, sought an advance ruling on the classification of services provided. The applicant contended that the supply of elevators, tailor-made as per customer specifications, falls under Heading 8428 and is charged GST at 18%. They argued that the composite supply of works contract services under Heading 9954 should be charged at 18% as well. The applicant highlighted that for elevators installed in single residential units, a reduced GST rate of 12% applied as per Notification No. 11/2017 for works contract services. The jurisdictional officer, however, maintained that the GST rate for elevator services under SAC 995466 is 18%, irrespective of the installation location or usage. The applicant's contention was further supported by citing the case law of Kone Elevator India Pvt. Ltd. vs State of Tamil Nadu, emphasizing that the installation of lifts as permanent fixtures qualifies as a composite supply of works contract under the CGST Act, 2017.

Applicability of rate notification 11/2017 Central Tax (Rate):
Regarding the applicability of the rate notification 11/2017 Central Tax (Rate), the applicant argued that the supply, erection, and commissioning of tailor/custom-made lifts/elevators should be classified under SAC 995466 and attract GST at 18%, as per the entry in the notification. The ruling authority concurred with the applicant's argument, stating that the service provided falls under SAC 995466 - Installation services of lifts, escalators, etc., and is liable to GST at 18% [CGST - 9% + SGST - 9%] as per the specific entry in the notification. The ruling clarified that this rate applies regardless of whether the elevators are installed in single dwelling units, multi-dwelling buildings, or commercial structures, aligning with the specific description for classification purposes under the CGST Act, 2017.

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