Welding of railway tracks along with labour services is a ‘Composite Supply’ taxable at 18% GST

In re Purple Distributors Pvt Ltd (GST AAR West Bengal)

Welding of railway tracks along with labour services is a ‘Composite Supply’ taxable at 18% GST

The AAR, West Bengal in the matter of M/s Purple Distributors Pvt. Ltd.  [Advance Ruling No. WBAAR 18 of 2022 dated December 22, 2022] has ruled that welding process on the railway tracks along with supply of labour services shall be treated as ‘Composite Supply’ of services falling under Tariff 995429 and shall be taxable at the rate of 18% vide serial number 3(xii) of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017 (“the Services Rate Notification”).

Facts:

M/s Purple Distributors Pvt. Ltd. (“the Applicant”) was awarded a sub-contract from M/s Patil Rail Infrastructure Pvt. Ltd. (“the Principal Contractor”) wherein the work was to convert Short Welded Rails (“SWR”) to Long Welded Rails (“LWR”) by Flash Butt Welding process on the tracks. The work also included supply of all assistance of labour for welding of rail joints.

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