APPLICABILITY AND MODALITY OF GST a. Eligibility criteria for work contract Key principles to determine whether a contract is in relation to immovable property. 1. Is there any attachment of the goods to the land/structure/building? And 2. Any of the following 3 conditions will be applicable. i. Would the supply enable permanent beneficial enjoyment of the structure to which the goods are attached? ii. Whether the goods are attached to immovable property not merely for the operational efficiency but for improvement of immovable property? iii. Whether the removal of the goods entail substantial damage to the immovable property to which the said goods are attached? Out of the above-mentioned conditions, in case the first condition and any of the remaining conditions are fulfilled, the contract can be said to be in relation to immovable property. 3. Charging of GST will be based on milestone achieved. However, changes can may be incorporated based on explanations given by government or consultants. b. Eligibility criteria for Composite : Key principles to determine whether a contract is in relation to immovable / moveable property. 1. Contract is for building already existing building / premises. 2. Principle supply / service should be identifiable for scope. 3. Contract is with SITC scope. 4. Payment terms are linked to milestone achievement or supply. 5. Rate of GST is determined basis HSN / SAC code of principle supply. It will be applicable for entire package value. 6. Charging of GST will be based on material movement or services rendered or at the time of billing and it will be on the 100% value of the item. c. Eligibility criteria for itemized type of orders 1. Contract is only for Supply & OR for service scope. 2. Principle element cannot be identifiable from order. ( Spare order ) 3. Scope should not be SITC. 4. Payment terms should not be linked to milestone achievement. 5. Rate of GST is determined basis HSN / SAC code of individual item. 6. Charging of GST will be based on material movement or services rendered or at the time of billing and it will be on the 100% value of the item. 2.5
APPLICABILITY AND MODALITY OF GST a. Eligibility criteria for work contract Key principles to determine whether a contract is in relation to immovable property.
