The Karnataka Authority for Advance Ruling ( AAR ) has recently ruled that the works contract services provided for the Indian Railway attract Goods and Services Tax ( GST ) at 18%, regardless of the nature of contract as subcontractor or as main contractor.
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 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.
The applicant has stated that they are engaged in executing works contracts to Indian Railways such as construction of Rail under bridge works, construction of tunnels and supplying and stacking of ballast, earth work and also sub contract of all the mentioned works.
The applicant representatives further submitted contract agreement where in the Applicant has entered into a contract with Konkan Railway Corporation Limited for supplying and stacking of ballast at Thokur ballast depot, loading into KRCL hoppers for CTR (P) works under AEN/Udupi in the jurisdiction of Senior Regional Engineer, Karwar.
It was submitted that they are engaged in supply of works contract services to Indian Railways such as construction of Rail under bridge, construction of tunnels, execution of Earth Works Contract, supply and stacking of ballast and sub-contract of the above-mentioned contract works and wants to know the rate of GST on the same.
In this regard, the ruling authority perused the entry No. 3 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, which was amended vide Notification No. 3/2022-Central Tax (Rate) dated 13.07.2022.
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