2026-VIL-200-AAR
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SGST Advance Ruling Authority

GST – Classification of Supply, erection, testing and commissioning of fire protection system - Composite supply under Section 2(30) of the CGST Act, 2017 - Applicant supplied fire protection systems comprising pumps, pipes, valves, fittings, hydrant components and compressors to private industries and Government institutions, along with installation, testing and commissioning. Under the sample work order, the Applicant was required to supply the items, clear the site, build RCC pedestals and platforms, and erect, test and commission the system - Whether the supply, erection, testing and commissioning of the fire protection system constitutes a composite supply under Section 2(30) - HELD - A composite supply means two or more taxable supplies of goods or services which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. In the contract for the fire protection system, the supply of goods and the erection, testing and commissioning services are naturally bundled and supplied in conjunction with each other. The supply is a composite supply - Ordered accordingly - Fire protection system - Movable or immovable property for levy of GST - Applicant contended that the system is not permanently attached to the earth, that it can be dismantled and assembled as per the needs of the recipient, and that installation involves no earth work - Whether the fire protection system is movable or immovable property for the purpose of levy of GST - HELD - The Applicant is required to get the designated spot ready by clearing bushes and trees, build the necessary RCC pedestals and platforms, do the electric wiring, install the pipes, valves and gauges, connect the whole system, and carry out testing and commissioning. The components installed at the building or premises are intended to provide a permanent fire-protection infrastructure for the facility. They are not meant to be removed and relocated without substantial dismantling. The completed system therefore assumes the character of immovable property for the purpose of levy of GST - The fire protection system is regarded as immovable property - Works contract under Section 2(119) of the CGST Act, 2017 - Classification under SAC 9954 and applicable rate - Applicant sought to know whether the contract is a works contract covered under SAC 9954 and chargeable at 12%. The Applicant also supplied the system to Government institutions - Whether the contract for supply, erection, testing and commissioning of the fire protection system is a works contract covered under SAC 9954 and chargeable at the rate of 12% - HELD - A works contract means a contract for erection, installation, fitting out or commissioning of any immovable property wherein transfer of property in goods is involved in the execution of such contract. The fire protection system involves transfer of property in goods and erection, testing and commissioning of an immovable property. The contract is therefore a composite supply of works contract, which is treated as a supply of services under para 6 of Schedule II - Heading 9954 covers construction services. The electrical installation work, including fire alarm installation, is covered under SAC 995461. The firefighting water piping, sprinkler and hydrant network installation is covered under SAC 995462 - As regards the rate, the entry for composite supply of works contract provided to Government involves predominantly earth work. The sample work order requires excavation and backfilling, which are part of earth work. However, the charges for the same are minuscule in relation to the total contract amount. The works contract services therefore do not get covered under that entry, and the rate of 6% sought by the Applicant is not applicable - The contract is a works contract covered under SAC 9954. It is not chargeable at 12% and is not covered under Serial No. 3(vii) of Notification No. 11/2017-Central Tax (Rate).
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