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2019 (6) TMI 1308 - AAR - GSTClassification of services - rate of tax - applicant engaged in leasing out cranes and equipment and locomotives, provides diesel-hydraulic locomotives to several companies for placement/shunting of rakes/wagons/oil tankers from the siding or terminal of the Indian Railways to the factory premises of the company and vice versa - N/N. 11/2017-Central Tax (Rate) dated 28/06/2017 (corresponding State Notification No. 1135 - FT dated 28/06/2017), as amended from time to time. HELD THAT - Transportation of coal from Andal Station to DSTPS Siding is, therefore, railway transport, and the service of moving empty or loaded wagons/rakes at DSTPS Siding is nothing but the supporting service of railway pushing and towing (SAC 996731). It describes the nature of the Applicant s service more specifically than leasing or rental services concerning transport equipment, including containers with or without operator (SAC 997311) - The communication from the East Central Railway referred to above, which deals with the GST applicable to different services that the Railways offer to the customer, is not relevant in the present context. The Applicant s service to the DVC, as described in para no. 4.1, is classifiable as railway pushing and towing service (SAC 996731) and taxable @ 18% under Sl No Il(ii) of Notification No. 11/2017 - Central Tax (Rate) dated 28/06/2017 (corresponding State Notification No. 1135 - FT dated 28/06/2017), as amended from time to time.
Issues:
1. Admissibility of the application 2. Submission of the Applicant 3. Submission of the Revenue 4. Observations and findings of the Bench Admissibility of the application: The applicant sought a ruling on the classification of services provided involving leasing out cranes, equipment, and locomotives. The Authority admitted the application as the questions raised were related to the classification for the applicability of Rate Notifications (Service) under the GST Act. The concerned Revenue officer did not object to the admissibility, stating that the question was not pending or decided in any previous proceedings. Submission of the Applicant: The Applicant provided cranes and equipment on a monthly rental basis, charging GST at 18%. The issue revolved around the classification of services provided, particularly the leasing of diesel-hydraulic shunting locomotives. The Applicant argued that the service should be taxed at 5% based on applicable notifications, while the Revenue contended that it should be taxed at 18% under a different classification. Submission of the Revenue: The Revenue officer argued that the service of hiring diesel-hydraulic shunting locomotives should be classified as "railway pushing and towing service" and taxed at 18% under specific Rate Notifications. This differed from the Applicant's classification and tax rate proposal. Observations and findings of the Bench: The Bench analyzed the terms of the specific contract between the Applicant and the Damodar Valley Corporation (DVC) regarding the leasing of diesel shunting locomotives. The contract detailed the operational control, responsibilities, and scope of work for the locomotives. The Bench concluded that the services provided aligned more closely with "railway pushing and towing service" based on the Work Order issued by the DVC. The Bench referred to the Railways Act, 1989, to define the scope of railways and transportation services. It highlighted judicial precedents and legal definitions related to the public carriage of passengers or goods by railways, emphasizing that private sidings could fall under the definition of railways. Based on these considerations, the Bench ruled that the Applicant's service to the DVC was classified as "railway pushing and towing service" and should be taxed at 18% under specific Rate Notifications. In conclusion, the Authority ruled that the Applicant's service to the DVC was classified as "railway pushing and towing service" and should be taxed at 18% under relevant Rate Notifications. The ruling was deemed valid unless declared void under the provisions of the GST Act.
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