5% GST on Supply of Goods classified under Chapter 86 to Railways: General Tax Rate Applicable to Other Goods, says CBEC [Read Circular]

The Central Board of Excise and Customs (CBEC) clarified that when goods classified under chapter 86 is supplied to railways, it attracts five per cent GST. However, noramal GST rates are applicable in case of supply of other goods, a circular issued on Thursday said.

The Board has received representations seeking clarification regarding suppliers are making supplies to the railways of items classifiable under any chapter other than chapter 86, charging the GST rate of 5%.

The GST Council during its 25th meeting held on 18th January, 2018, discussed this issue and directed the Government to issue a clarification regarding applicable GST rates on various supplies made to the Indian Railways.

Accordingly, the Board clarified the following, (a) only the goods classified under Chapter 86, supplied to the railways attract 5% GST rate with no refund of unutilised input tax credit and (b) other goods [falling in any other chapter], would attract the general applicable GST rates to such goods, under the aforesaid notifications, even if supplied to the railways.