COMPOSITE SUPPLY VS WORKS CONTRACT

[NAMAN DOKANIA]

Sir,

A Private Limited Company entered into a contract with Railway to under take an activity amounting to Rs. (say) 20 Crores which content the following:

1. Supply of ballast (Stone)and spreading the same under the tracks /- Rs. 8 Crores

2. Transportation of Ballast from Factory to railway track point : Rs. 5 crores

3. Linking of railway tracks by tracks being provided by railways :- 7 crores

Will the service be a composite supply taxable @5% being ballast being a principal supply or a works contract service @18%.

Please state the reasoning as well. Any further info is most welcomed sire/madame.

P.s. Tax rate on ballast is 5%

AI Summary

Composite supply classification may not apply; GST requires separate taxation of distinct services under specific rates.
Composite-supply benefit may not apply: each component (ballast supply, transport, track-linking) can be taxed separately and specifically under GST; works contract and restaurant services are treated as supplies of service chargeable at specific rates. Alternatively, ballast plus transport might form a composite supply depending on contractual terms, and track-linking may constitute job work attracting a different rate.