The Karnataka Authority for Advance Ruling ( AAR ) has recently ruled that the supply of Ballast to Railways attract Goods and Services Tax ( GST ) at 5% (CGST 2.5% and SGST 2.5%).
The applicant is engaged in executing works contract to Indian Railways such as construction of Rail under bridge, construction of tunnels and supplying and stacking of ballast, earth work and also sub contract of all the mentioned works.
The applicant had sought advance ruling in respect of the following questions:
I. What percentage of GST output tax should be charged for the following nature of works contract executed to Indian Railways : –
On Railway under Bridge works
Construction of Tunnels for Railways
Supply and stacking of ballast
Execution of Earth Works Contract
Subcontract works for the above mentioned contract works
B.K. Srinivas, Advocate and Duly Authorized Representative appeared for personal hearing proceedings and reiterated the facts narrated in their application.
It was submitted that, “The Applicant has entered into a contract with Konkan Railway Corporation Limited for supplying and stacking ballast at Thokur ballast depot, loading into KRCL hoppers for CTR (P) works under AEN / Udupi. That is the applicant is supplying ballast to the Konkan Railway Corporation Limited and the supply of ballast to railways is exigible to GST at 5% (CGST @ 2.5% and SGST (HSN 2517) as per entry No. 126 of Schedule 1 of Notification No. 1/2017-Centra1 Tax (Rate), dated: 28.06.2017.”
It was ruled by the Authority Members Dr M P Ravi Prasad and Kiran T Reddy that, “Supply of ballast to railways is exigible to GST at 5%(CGST @2.5% and SGST (@2.5%) (HSN 2517) as per entry No. 126 of Schedule I of Notification No. 1/201 central Tax (Rate), dated: 28.06.2017.“
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