Facts: A contract was awarded for supply of Engineering, Procurement & Construction (EPC) for establishment of Integrated Cryogenic Engine & Stage Test Facility (ICET) wherein both goods & services are supplied.
Contention: Advance ruling was sought to determine whether the above contract be construed to be composite supply under GST?
Ruling: Yes, the above contract is a composite contract under GST.
Explanation: Under GST, composite supply is a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both which are naturally bundled and supplied in conjunction with each other in ordinary course of business.
In the case under review, scope of work involves planning, documentation, site management, procurement of equipment, civil, electrical and structural works, etc., followed by commissioning of the entire system to have an operational Integrated Cryogenic Engine & Stage Test Facility for the satellite launch program.
Hence, mere supply of equipment/instruments is not done but the same is integrated, erected and finally commissioned at Integrated Cryogenic Engine & Stage Test Facility. Also, the invoicing for supply of equipment/instruments and services is indivisible.Therefore, the whole contract for establishment of Integrated Cryogenic Engine & Stage Test Facility (ICET) is a composite contract as various supplies of goods and services are naturally bundled together.