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“works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;
The expression ‘works contract’ is limited to contracts to do with immoveable property, unlike the existing understanding of the phrase which also extends to moveable property. A contract will amount to a ‘works contract’ only where there is a transfer of property in goods, while such a transfer may result in goods or anything else (i.e., immoveable property). A contract in relation to movable property, however, would be treated as a ‘composite supply’ of goods or services depending on the principal supply (refer analysis of Section 8).
For GST law, works contract as defined above will be treated as a supply of service, thereby putting a closure to the deliberation on the methodology of segregating the works contract between goods and services.
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