Works contract treatment for EPABX installation in railways qualifies for concessional GST under the notified entry.

Supply, installation and commissioning of EPABX systems for Railways, with associated cabling and related work, was treated as a works contract because multiple components were assembled into an installed system that could not be removed and marketed without dismantling, and dismantling could damage parts. The installed system was therefore regarded as immovable property, and the supply was held to fall within the concessional entry for composite works contract by way of installation or commissioning of original works pertaining to railways, attracting GST at 12%.

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Issues: Whether supply, installation and commissioning of EPABX systems for Railways, including associated cabling and related work, falls within Entry No. 3(v) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and is liable to GST at 12%.

Analysis: The supply involved assembly and connection of multiple components into a functioning EPABX system, with transfer of property in goods in the course of execution. The installed system could not be taken away or marketed as such without dismantling, and dismantling could damage parts such as cables and connectors. On that basis, the installed system was treated as an immovable property and the service as works contract service. The supply was also held to pertain to Railways, since railway includes offices and works constructed for railway purposes. The classification adopted the statutory concept of works contract under section 2(119) of the Central Goods and Services Tax Act, 2017 and the concessional entry for composite supply of works contract by way of installation or commissioning of original works pertaining to railways.

Conclusion: The supply of EPABX systems for Railways falls under Entry No. 3(v) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and is taxable at 12% GST.

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