The Odisha Authority of Advance Ruling (AAR) ruled that the Work Contract Given to NBCC by IIT constitutes a ‘Composite Supply Contract’.
The applicant, M/s NBCC (INDIA) Limited is a Government of India Enterprises under the aegis of Ministry of Urban Development, Government of India.
The applicant has sought the advance ruling on the issue of whether the works executed by them can be treated as composite supply or not.
The Coram of G.K. Pati and Dilip Satpathy ruled that IIT, Bhubaneswar entrusted the entire project works on a turnkey basis to M/s. NBCC(India) Ltd. for works relating to Planning, designing, and supervision of construction of various building infrastructure development and interior work, etc. in IIT, Bhubaneswar campus, and its extended campus. Under para 1 of the agreement, it is clearly mentioned that after completion of the project M/s. NBCC(India) Ltd. will hand over the building to IIT, Bhubaneswar in ready-to-use condition. Nowhere in the agreement, the work orders were offered to M/s. NBCC(India) Ltd. differently for different works and also there are no such conditions made in the agreement to make separate invoices for separate works. The agreement clearly speaks that the project was awarded on a turnkey basis.
“The turnkey project works executed by M/s. NBCC (India) Ltd. is a “works contract” in terms of clause 119 of Section 2 of CGST/OGST Act, 2017 and ought to be treated as a composite supply as per clause 30 of Section 2 of CGST/OGST Act. Composite supply work contracts are treated as a supply of service under Schedule II para 6 of the CGST/OGST Act. Therefore, we are not inclined to accept the decision of the Authority for Advance Ruling that the works contract entrusted to Applicant M/s. NBCC (India) Ltd. cannot be termed as composite supply,” the AAR ruled.
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