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2022 (5) TMI 180 - AAR - GSTLevy of IGST - dismantling of existing sleeper fixing and/or installation of new (H-Beam Steel sleepers) - composite supply of works contract - execution of original work or not - benefit of Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017 - HELD THAT - On perusal of the detailed scope of work, it transpires that the applicant has been awarded the contract which involves fabrication, manufacture and supply of galvanized H-Beam steel sleepers after dismantling of existing bridge timber/steel channel sleepers on bridge. The applicant doesn t construct a new bridge nor is the applicant entrusted to lay a new railway track. The applicant undertakes the work of replacing the old sleepers with new one which essentially requires dismantling as well as removal of existing sleepers first. It is also found that the work order has been issued wherein Unit has been specified as per sleeper and the rate has been determined based on (i) number of sleepers to be dismantled and removed and (ii) number of sleepers to be supplied and installed which also establishes the fact that the applicant has been awarded the contract to replace the existing sleepers only - Further, nowhere in the work order, it has been mentioned that the work is related to additions and alterations to abandoned or damaged structures that are required to make them workable. The instant composite supply of works contract cannot be considered as original work in terms of definition given in clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
Issues Involved:
1. Whether dismantling of existing sleeper fixing and/or installation of new (H-Beam Steel sleepers) amounts to execution of original work and attracts IGST @12% as per Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017. 2. Whether the applicant is eligible for the benefit of Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017 by paying IGST @ 12% for construction, erection, commission, or installation of original works pertaining to Railways. Issue-wise Detailed Analysis: 1. Whether dismantling of existing sleeper fixing and/or installation of new (H-Beam Steel sleepers) amounts to execution of original work and attracts IGST @12% as per Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017: The applicant was awarded a contract by East Coast Railways for dismantling existing bridge timber/steel channel sleepers and installing H-Beam steel sleepers. The applicant contends that this work is original work and not repair or maintenance, thus eligible for IGST @12% under Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017. The Authority examined whether the work qualifies as "original work" under clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which defines original works as: - All new constructions; - Additions and alterations to abandoned or damaged structures to make them workable; - Erection, commissioning, or installation of plant, machinery, or equipment or structures. The Authority found that the work involves replacing old sleepers with new ones, not constructing a new bridge or laying a new track. The work order specifies the unit as 'per sleeper,' indicating the contract is for replacement, not new construction. Therefore, the work doesn't qualify as "original work" under the given definition. Ruling: The supply is a composite supply of works contract as defined in clause (119) of section 2 of the GST Act but does not qualify as "original work" under clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Hence, it does not attract IGST @12% under Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017. 2. Whether the applicant is eligible for the benefit of Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017 by paying IGST @ 12% for construction, erection, commission, or installation of original works pertaining to Railways: The applicant argued that the work is not repair or maintenance but new construction, thus eligible for the benefit of the said notification. However, the Authority determined that the work involves replacing existing sleepers, not new construction or significant alterations to abandoned or damaged structures. Ruling: The applicant is not eligible for the benefit of Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017 by paying IGST @ 12% for the said works, as the work does not qualify as "original work." Conclusion: The Authority concluded that the work of dismantling and installing new sleepers does not amount to original work and does not attract IGST @12%. The applicant is not eligible for the benefits of Notification No. 20/2017-Integrated Tax (Rate) dated 22.08.2017.
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