CBIC notifies Shift in Taxability of Goods and Services Supplied by Indian Railways to FCM to Avail ITC

The Central Board of Indirect Taxes and Customs (CBIC) notified amendments through Notification No. 19/2023-Central Tax (Rate) to Goods and Service Tax (GST) Rates which changes the taxability of Indian railways from Reverse Charge Mechanism (RCM) to Forward Charge Mechanism (FCM) enabling them to avail Income tax Credit (ITC).

Exercising powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, made an amendment in the notification of the Government of India, Ministry of Finance (Department of Revenue), No. 4/2017- Central Tax (Rate), dated the 28th June 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 676(E), dated the 28th June 2017.

In the said notification, in the Table, against S. No. 6, in column 4, for the entry, it was substituted, namely:

“Central Government [excluding Ministry of Railways (Indian Railways)], State Government, Union territory or a local authority.”

The notification shall come into force with effect from the 20th day of October 2023. The principal notification No.  4/2017-Central Tax (Rate), dated the 28th June 2017, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 676(E), dated the 28th June 2017 and was last amended by notification No. 14/2022-Central Tax (Rate), dated the 30th December 2022.

The same amendments have been added to the integrated tax rate, vide notification no. 22/2023 by amending No. 4/2017-IntegratedTax (Rate), dated the 28th June 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 669(E), dated the 28th June 2017.

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