18% GST leviable on works contract services to Indian Railways; 12% on works contract services involving predominantly earthwork

In re S.K. Swami & Company  (GST AAR Karnataka)

GST @ 18% leviable on works contract services to Indian Railways; 12% on works contract services involving predominantly earthwork

The AAR, Karnataka in the matter of M/s S.K. Swami & Company [Advance Ruling No. KAR ADRG 05/2023 dated January 23, 2023] has ruled the rate of Goods and Services Tax (“GST”) @ 18% is exigible on works contract services executed to Indian Railways by the assessee either as a main contractor or as a sub-contractor for the construction of railways under-bridge and tunnels and works contract services involving predominantly earth work would attract GST @ 12% as per Notification No. 11/2017 Central Tax (Rate) dated June 28, 2017 (“the Services Rate Notification”). Further, GST @ 5% is exigible for the supply of ballast to railways as per Notification No. 1/2017- Central Tax (Rate) dated June 28, 2017 (“the Goods Rate Notification”).

Facts:

M/s S.K. Swami & Company (“the Applicant”) is engaged in executing works contracts to Indian Railways such as construction of rail under bridge works and tunnels; supplying and stacking of ballast; works contract services involving predominantly earthwork and sub contracts of all such works. Further, the Applicant has entered into a contract with Konkan Railway Corporation Limited for supplying and stacking of ballast.

Please become a Premium member. If you are already a Premium member, login here to access the full content.