GST on Contract for Supply & Installation of Oxygen Tank

[ROHIT GOEL]

Dear experts,

One of our clients is engaged in business of Supply and Installation of Oxygen Tanks at various Hospital sites. As part of the contract, they get the Tank made and transport tank to customer site. There they perform civil work, build Concrete foundations and thereafter tank is attached to earth. However as per nature of the tank, it can be detached from earth after destroying the foundations and as it is can be deployed at any other site by building new foundations there.

The question is whether such tank can be called an immovable property and thus whether the contract can be called works contract u/s 2(119) of CGST Act or it would be composite supply where principal supply will be Supply of Tank.

AI Summary

Immovability of fitted equipment determines whether supply plus installation is treated as works contract or supply of goods.
Whether supply and installation of oxygen tanks is a works contract depends on the annexation test: the degree, method and purpose of attachment and especially whether the tank can be removed and relocated without damage. Recent authority prefers the practical movability test over intention; commentators diverge-some treating tanks detachable only by destroying foundations as movable (supply/composite supply), others seeing strong annexation as indicating immovability and a works contract.