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Issues: Whether the contract for supply of cattle feed plant, together with erection, installation and commissioning services, without civil work, constituted works contract service under GST and whether the plant amounted to immovable property.
Analysis: The determining factor was whether the supply resulted in an immovable property, because works contract under GST applies only to contracts for building, construction, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property involving transfer of property in goods. The plant supplied by the appellant consisted of interlinked machinery, structures, electrical systems, piping, foundations, grouting and commissioning activities, all designed to operate as a single functional unit. On the facts, the plant could not be shifted without dismantling and re-erection, and the manner of installation showed permanency and attachment to the earth. The cited precedents were distinguished on facts, and the earlier reference order relied upon by the appellant was treated as not assisting the appellant in view of the nature of the present contract and the binding clarification that a dairy plant installed on turnkey basis constitutes works contract.
Conclusion: The cattle feed plant was held to be immovable property, and the composite supply for its supply, erection, installation and commissioning was held to be works contract service taxable at the applicable rate.
Ratio Decidendi: A turnkey contract for supply and installation of a plant will be treated as works contract service where the installed plant, by reason of its permanent attachment and functional integration, results in an immovable property.
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