09 October 2020
Our company has been awarded a contract to Supply, Install, Test and Commission (SITC) Audio and Video (AV) equipment at a club. Since it is related to immovable property and involves provision of both goods and services, it will fall under Works Contract which is treated as supply of service as per Schedule II. However will it be a continuous supply of service? “Continuous supply of services” means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations. Our service is under contract and it will take more than three months to supply and install all the AV equipment. Payment is also split being; 50% advance, 25% on installation and 25% after final commissioning. However, service is not recurring. Will it be considered to be provided continuously? Whether or not it is “Continuous supply of services” will help us to determine when to raise invoices. Thus, is SITC “continuous supply of service” under GST?
09 October 2020
No, this is not continuous supply. Your contract is only to supply and install the Audio/Video equipment. Another point is that payment obligation is not on periodic basis but is on the progress of the work like in advance, on supply, on installation etc.
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