2018 (10) TMI 1245 - AAR - GST

Levy of GST - Rate of tax - civil works contract for construction of roads, factory godown etc, for M/s. Madhepura Electric locomotive private limited, Madhepura (MEL) - exemption under N/N. 20/2017. Held that - M/s. Madhepura Electric locomotive private limited, Madhepura (MEL) is a Joint Venture company, which is formed as a Special Purpose Vehicle (SPV) - Electric Locomotives will be manufactured by Madhepura Electric locomotive private limited, Madhepura, which will be suppled to Indian Railways against Valuable Consideration - also, the locomotives would be maintained by this company. The works contract are given by MEL to M/s. Tata Project pvt. ltd. for construction of factory, roads, godowns etc - Works done by M/s. Tata Project will get covered under Section 2(119), and the works done by Tata Project will not be connected to Railways. Ruling - Works done by Appellant Tata Project is not connected to railways and is not covered under N/N. 20/2017-(tax), Sl. no. 3(V) - the same wil be taxable at 9% GST and 9% CGST.

Summary

Issues:
1. Definition of 'Railway' under the Bihar Goods and Services Tax Act, 2017.
2. Interpretation of 'Composite supply of works contract' related to railways.

Analysis:
1. The judgment delves into the definition of 'Railway' as per the Bihar Goods and Services Tax Act, 2017. It elucidates that 'Railway' encompasses various components such as lands, lines of rails, electric traction equipment, rolling stock, stations, offices, warehouses, and other related infrastructure. The comprehensive definition provided in the judgment aims to clarify the scope and coverage of the term 'Railway' for the purpose of taxation under the Act.

2. The judgment also addresses the issue of 'Composite supply of works contract' concerning railways. It specifically mentions that the works contract supplied for the construction, erection, commissioning, or installation of original works related to railways falls under this category. Notably, the judgment excludes monorail and metro from the purview of this provision, emphasizing the specificity and applicability of the definition within the context of railway-related activities. The detailed analysis in the judgment ensures a clear understanding of the treatment of works contracts in the realm of railway projects under the Bihar Goods and Services Tax Act, 2017.

Furthermore, the judgment references several legal precedents, including Civil Appeal cases, to support and strengthen the interpretation and application of relevant provisions. These citations add weight to the arguments presented and contribute to the overall legal reasoning provided in the judgment. Overall, the judgment by the Authority for Advance Ruling in Bihar offers a comprehensive analysis of the definitions and provisions related to railways and works contracts under the state's GST Act, providing clarity and guidance for future interpretations and implementations in similar cases.