The Maharashtra Authority of Advance Rulings ( AAR ) in an application filed by Vertiv Energy Pvt Ltd held that supply of UPS systems along with the provision of services of its installation, testing and commissioning constitutes a composite supply.
The applicant engaged in the manufacturing of various UPS systems entered into a contract with Delhi Metro Railway Corporation (DMRC) for supply, installation, testing, and commission of UPS systems in 2014
The issue before the present Authority was whether the above contract entered into with DMRC by applicant qualifies as a supply of works contract u/s 2(119) of the CGST Act.
The Bench constituting of members B. Timothy and A.A. Chahure held that the contract would not qualify as a supply of works contract u/s 2(119) of the CGST Act since the same does not lead to the emergence of immovable property. The Bench found that the applicant first dispatches the goods to DMRC under an Invoice and E Way Bill. Hence, the title in property of the said goods is transferred as soon as the delivery is completed. It is after such delivery that the installation takes place.
Further, it has been held that the supply of UPS Systems by the applicant is the major part of the contract. These goods are delivered to the client by the applicant and such goods that are supplied are used by the applicant to provide services of installation, testing and commissioning of substations. The above hence is a Composite Supply.
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