Classification of service— In the instant case, the applicant supplies cattle feed plant involving supply of various equipment and machineries. IDMC supplies complete cattle feed plant involving equipment receiving raw-material till packaging of finished goods with erection, installation& commissioning service, with or without civil work, as per the requirement of the customer. IDMC submits that these activities of installation, commissioning, whether, with civil or without civil, forms part of bundle only and is as per industry practice.

Question on which Advance Ruling sought—

1. Whether contract involving supply of equipment / machinery & erection, installation& commissioning services without civil work thereof would be contemplated as composite supply of cattle feed plant under GST regime? If the supplies would qualify as composite supply, what would be the classification of this bundle and applicable tax rate thereon in accordance with Notification No. 01/2017 – CT (Rate) dated June 28, 2017 (as amended).

2. Whether contract involving supply of equipment / machinery & erection, installation& commissioning services with civil work thereof would be contemplated as works contract service or not. If the supplies would qualify as composite supply of works contract, what would be the classification and applicable tax rate thereon in accordance with Notification No. 11/2017 – CT (Rate) dated June 28, 2017 (as amended).

The issue hinges on the ‘test of permanency’ to determine the nature of subject supply of an installed, functional and operational plant.

Held that— Supply of a functional Cattle Feed Plant, inclusive of its Erection, Installation and Commissioning and related works involved for both the question 1&2, is Works Contract Service Supply, falling at SAC998732 attracting GST leviability at 18%.