“Work Contract in relation to works contract for repair or renovation or other improvements of railway track attracts 18% Goods and Services Tax ( GST )”, ruled the Advance Authority of Ruling ( AAR ), Chhattisgarh.
The applicant M/s AKM Balaji filed an application under section 97 of the Chhatisgrah Goods and Services Tax Act, 2017, to sought ruling on the GST rate applicable to the Works Contract Service in relation to repair/renewal of the railway track.
The applicant engaged in the activities of providing works contracts to its client M/s RITES Ltd. where it provided repairing or renovation or other improvements included supply of P. Way fillings & Track Ballast, PSC & Stel Channel Sleepers, Paints & Crossing (Excluding Supply of rails), Construction of Retaining Wall, drain etc for railway track for a total value of Rs. 23,99,974.
The personal hearing was conducted and the representative of the applicant Priyesh Agarwal C.A. appeared before the authorities to make submissions on behalf.
The applicant asserted that the services provided by them shall be classified under HSN 995429 under Annexure to Notification 11. It read as “Services involving repair, alterations, replacements, renovation, maintenance of the constructions covered above”.
Moreover, the service provided shall be termed as “works contract” under section 2(119) of the Central Goods and Services Tax Act, 2017.
The applicants contended that the the residual entry no. 3(xii) of notification 11 of 2017 Central Tax (rate) attracted 9% GST to CGST and thus 9% to SGST i.e., 18% GST.
Further contended that the M/s RITES Ltd. sought to classify the said services under entry no. 3(v) of the same notification and the rate shal be 6% to CGST and 6% to SGST, i.e., 12% GST.
The bench of members Sonal K. Mishra and Rajesh Kumar Singh observed the amendments in the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, which is relevant to the issue.
Further ruled that the activities referred to by the applicant as works contract services provided to M/s RITES Ltd. under the letter of acceptance in relation to work of renewal or renovation of railway track from Karonji Station to Bhatgaon Station would be liable to GST at the rate of 18%.
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