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2023 (1) TMI 1164 - AAR - GSTPercentage of GST output tax to be charged - 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 contract works - HELD THAT - The applicant has stated 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 contract works and wants to know the rate of GST on the same - works contract services supplied by the Applicant to Indian Railways such as construction of Rail under bridge and construction of tunnels are covered under entry No. 3(xii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and is exigible to GST at 18%. Works contract services involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) executed to Indian Railways (Central Government) by the Applicant is exigible to GST at 12% if the Applicant is providing the services either as a main contractor or as a sub-contractor to main contractor. Supply of ballast to railways is exigible to GST at 5% (HSN 2517) as per entry No. 126 of Schedule I of Notification No. 1/2017-Central Tax (Rate), dated 28.06.2017.
Issues:
1. Determination of GST output tax percentage for various works contract services provided to Indian Railways. Analysis: The applicant, a Partnership firm engaged in works contracts for Indian Railways, sought an advance ruling on the GST output tax percentage for different services provided. The application was found admissible under Section 97(2)(e) of the CGST Act, 2017. The applicant specifically inquired about the GST rates for works like construction of Rail under bridge, tunnels, ballast supply, earth works contract, and subcontract works. During the personal hearing, the authorized representative reiterated the facts presented in the application. The Authority noted that the CGST Act and KGST Act are similar in most aspects. The applicant's services to Indian Railways were analyzed based on relevant notifications. For works like construction of Rail under bridge and tunnels, the GST rate was determined to be 18%. If the works involved predominantly earth work, constituting over 75% of the contract value, the GST rate was set at 12%. In the case of supplying ballast to railways, the GST rate was established at 5%. The rulings were based on specific entries in the notifications related to construction services and supply of goods. The Authority provided detailed explanations and references to the applicable notifications to support their rulings. The analysis considered the nature of services provided, the contract details, and the specific conditions outlined in the notifications to arrive at the conclusive GST rates for each type of works contract service provided to Indian Railways. Therefore, the Authority issued a comprehensive ruling specifying the GST rates applicable to different works contract services provided by the applicant to Indian Railways. The ruling clarified the percentage of GST output tax for each type of service, ensuring compliance with the relevant provisions of the CGST Act and notifications issued under it.
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