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12% GST on Composite Supply of Works Contract for Metro & Monorail: AAR [Read Order]

GST Composite Supply - Composite Contracts - Works Contract

The Authority of Advance Ruling (AAR), West Bengal ruled that 12% of GST is applicable on the composite supply of work contract for Metro & Monorail.

An application was filed by the applicant namely ABB lndia Ltd., it was observed that the composite supply of works contract, as defined under section 2(119) of the Goods and Service Tax (GST) Act, supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro, is taxable at 12% rate.

The applicant was engaged in the activity of providing technological and system solutions, including electrification, industrial automation, motion and robotics, data management and production control systems. Rail Vikas Nigam Ltd. (RVNL) has awarded it the contract for extension of Supervisory Control and Data Acquisition (SCADA) for Noapara Dakshineswar Metro Corridor.

The question raised in the application was whether Entry 3(v) of Notification dated June 28, 2017, as amended and collectively called the Rate Notification, is applicable for its supply to Rail Vikas Nigam Ltd. (RVNL) by way of erection, commissioning, installation, completion etc. of Supervisory Control and Data Acquisition (SCADA) System or not?

The Authority of Advance Ruling (AAR) consisting of the members Susmita Bhatacharya and Parthsarthi Dey held that the composite supply of works contract, as defined under section 2(119) of the Goods and Service Tax (GST) Act, supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro, is taxable at 12% rate.

Therefore the authority affirmed that the Applicant is making a composite supply of works contract taxable under Entry No. 3 (v)(a) of Notification dated June 28, 2017 as amended, being erection, commissioning and installation of original work pertaining to railways, including metro.

To Read the full text of the Order CLICK HERE
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