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TMI Blog2023 (1) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Commissioning of 140MT In-Motion Weigh Bridge and other allied works etc., (Pkg-III) in connection with construction of New Railway siding at Jhanjra Area, ECL, Dist. Paschim Bardhaman, West Bengal - On due consideration of the nature of works being undertaken by the applicant as detailed in the scope of work, we are of the opinion that the work is in relation to immovable property and certainly involves transfer of property in goods thereby qualifies to be a works contract as defined in clause (119) of section 2 of the GST Act. Whether the said work can be considered as original works ? - HELD THAT:- In the instant case the applicant executes construction work in connection of New Railway Sidings at Jhanjha Area of Eastern Coalfield Limited. Thus, we accept the contention of the applicant that the work can be considered as original works as defined in clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Whether the work can be considered as works contract pertaining to railways? - HELD THAT:- In the case of M/s Steadfast Corporation Ltd, Telengana [ 2016 (9) TMI 50 - AUTHORITY FOR ADVANCE RULINGS ], the applicant proposed to take up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jhanjra Area, P.O. Loudoha, Dist-Paschim Bardhaman, PIN-713363 has awarded the applicant the following work vide Letter of Acceptance issued on 02.03.2021: Construction of earthwork in formation, Major Minor Bridge, ROB, Drain, P.Way Linking work including supply of Track Ballast, P. Way Fittings, Points Crossings, Derailing Switches etc., Construction of Service Building including Internal Electrification, Installation, Testing Commissioning of 140MT In-Motion Weigh Bridge and other allied works etc., (Pkg-III) in connection with construction of New Railway siding at Jhanjra Area, ECL, Dist. Paschim Bardhaman, West Bengal. 1.3 The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under seeking advance ruling as to: (1) What is the rate of tax for the works being undertaken by the applicant for construction of new railway siding at Jhanjra Area, ECL Dist. Paschim Bardhaman, West Bengal against order received from M/s. RITES Ltd. (2) Whether the work awarded can be covered under the definition of Works Contract as defined u/s 2(119) of the CGST Act, 2017. (3) Whether the rate of tax for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule 9-Any other Unforeseen Items; (j) Schedule 10- Electrical works for Weigh Bridge, TMS Building, FOIS Building, Sub Station, Building, DG Room, Pump Room, Panel Building, Augmentation of TRD Depot, Switching Post, Switch panel room etc. 2.4 The applicant contends that the aforesaid work may be considered as composite supply of works contract as defined in clause (119) of section 2 of the GST Act which is supplied by way of construction of original works pertaining to railways and therefore would be taxable @ 12% vide serial number 3(v) (a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, as amended from time to time [corresponding West Bengal State Notification No. 1135 F.T. dated 28.06.2017]. 2.5 According to the applicant, tax would be levied at the above-referred rate subject to fulfilment of following conditions: (a) the work should be a works contract; (b) it should be an original work; (c) the work should be pertaining to railways. 2.6 The applicant submits that a work would be treated as a works contract if that work is done on land or earth or for immovable property and there is a transfer of property in goods involved in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilway; (c) all electric traction equipment, power supply and distribution installations used for the purposes of, or in connection with, a railway; (d) all rolling stock, stations, offices, warehouses, wharves, workshops, manufactories, fixed plant and machinery, roads and streets, running rooms, rest houses, institutes, hospitals, water works and water supply installations staff dwellings and any other works constructed for the purpose of, or in connection with, railway; (e) all vehicles which are used on any road for the purposes of traffic of a railway and owned, hired or worked by a railway; and (f) all ferries, ships, boats and rafts which are used on any canal, river, lake or other navigable inland waters for the purposes of the traffic of a railway and owned, hired or worked by a railway administration, but does not include- (i) a tramway wholly within a municipal area; and (ii) lines of rails built in any exhibition ground, fair, park or any other place solely for the purpose of recreation; 2.9 Furthermore, the applicant refers to sub-section (20) and (25) of section 2 of the Railways Act, 1989 which defines the expressions Government rail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their site at Jhanjra Area, Dist Paschim Burdwan, West Bengal to all over India and the said work is commercial in nature. However, meaning of railway defines in Section 2(31) of The Railways Act, 1989 the said definition states that Railways means a railway, or any portion of a railway, for the public carriage of passengers or goods. Thus, the exclusion is available only for railway sidings which are constructed for public carriage of passengers or goods. In the present case railway sidings constructed by the applicant are used for carriage of goods for private parties for private use of ECL (Eastern Coalfield Limited) a Public Undertaking Company owned by M/s Coal India Limited. From the above discussion, it appears that the Works Contract received from M/s RITES Limited is not pertaining to railways . So, not covered the definition of entry Serial no 3(v)(a) of Notification no 11/2017-Central Tax (rate) dated 28.06.2017 as amended by Notification no 20/2017 Central Tax (rate) dated 22.08.2017. So, the Rate of Tax in respect of sub-contract work received from M/s RITES Limited for construction of new railway siding at Jhanjra Area, ECL, Dist. Paschim Bard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under the definition of Works Contract as defined under Section 2(119) of the CGST Act, 2017. 3.3 The rate of GST for the construction of rail infrastructure facilities to other than railways falls under the definition of Sl. No. 3(xii) vide Notification No 11/2017-Central Tax (Rate) dated 28/06/2017 as amended by Notification No.20/2017- Central Tax (Rate) dated 22/08/2017, Notification No.24/2017-Central Tax (Rate) dated 21/09/2017, Notification No.31/2017-Central Tax (Rate) dated 13/10/2017 and Notification No.01/2018-Central Tax (Rate) dated 25/01/2018 as applicable. The rate of tax to be calculated @ 18% (9% of CGST + 9% of SGST) on Taxable Value. 3.4 The above said Work can be considered as Works Contract but not pertaining to railways including monorail or metro. 4. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representative of the applicant during the course of personal hearing. We have also considered the submission made by the officer concerned from the revenue. 4.2 The issue involved in the instant case, as we find, is to determine whether the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property shall include land, benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached to the earth. Further, for the purpose of interpretation of the expression attached to the earth , section 3 of the Transfer of Property Act, 1882 may be referred to which reads as follows: attached to the earth means- (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached; In the case of Triveni Engineering Industries Ltd. Anr. Vs. Commissioner of Central Excise Anr, the Hon ble Supreme Court of India has observed as follows: From a combined reading of the definition of immovable property in Section 3 of the Transfer of Property Act, Section 3(25) of the General Clauses Act, it is evident that in an immovable property there is neither mobility nor marketability as understood in the Excise Law. Whether an article is permanently fastened to anything attached to the earth require determination of both the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise; In the instant case the applicant executes construction work in connection of New Railway Sidings at Jhanjha Area of Eastern Coalfield Limited. Thus, we accept the contention of the applicant that the work can be considered as original works as defined in clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Whether the work can be considered as works contract pertaining to railways: 4.7 We have already decided the issue that the scope of work, as outlined in the Letter of Acceptance issued by RITES Limited to the applicant, falls under the category of works contract as defined in clause (119) of section 2 of the GST Act and also qualifies to be an original works within the meaning ascribed to the term in para 2(zs) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Thus, the only issue left with us is to decide whether the work being undertaken by the applicant pertains to railways or not. 4.8 During the service tax regime, services of construction, erection, commissioning or installatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck etc. of his siding either himself or through the Railways. The owner shall enter into an Agreement with the concerned Division regarding the Operation maintenance of his siding. (ii) Siding owner shall, at all times, maintain his siding properly, so that train operations are not hindered. (iii) Siding owner shall be liable to pay damage costs, as advised by the Division, if the rolling stock of the Railway is derailed/damaged inside the siding due to bad maintenance conditions.[Para 9.1] o Handling of wagons in Sidings: (i) The siding owner shall ensure that no railway wagon gets damaged during loading/unloading in his siding. For damage deficiencies caused due to the fault of the siding owner, damage deficiency charge shall be raised as per the extant rules.[Para 9.5.2] o Maintenance of S T Assets- Maintenance of Signal Telecommunication equipments, provided at the take off point of the siding and linked to the main line Railway Track, shall be maintained by Railway at its own expense.[Para 9.6.1] Maintenance of Signal Telecommunication equipments inside the siding, which includes Block Instrument Communication Equipment, Interlocki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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