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Issues: (i) Whether the civil works relating to construction of rail infrastructure for a railway siding qualify for the concessional GST rate under entry 3(v)(a) of Notification No. 11/2017-Central Tax (Rate); (ii) whether there was any change in the GST rate from 1.1.2022 for such supplies.
Issue (i): Whether the civil works relating to construction of rail infrastructure for a railway siding qualify for the concessional GST rate under entry 3(v)(a) of Notification No. 11/2017-Central Tax (Rate).
Analysis: The concessional entry applies only when the supply is a composite supply of works contract, and the works are by way of construction, erection, commissioning or installation of original works pertaining to railways. The classification entry and explanatory notes indicate that railway-related civil engineering works may fall within the relevant heading, but the authority found that the record did not establish with sufficient clarity that the proposed work was a composite supply or that it satisfied the statutory definition of works contract. The entry was held to apply only if both conditions are met, failing which the residual rate would govern.
Conclusion: The concessional rate of 12% is applicable only if the supplied work is a composite supply and a works contract; otherwise GST at 18% applies under the residual entry. The ruling is therefore conditional and partly in favour of the assessee.
Issue (ii): Whether there was any change in the GST rate from 1.1.2022 for such supplies.
Analysis: The ruling records that the rate applicable to composite supply of works contract pertaining to railways remained unchanged from 1.1.2022 for the relevant category of supplies.
Conclusion: There was no change in the GST rate from 1.1.2022 for such composite supply of works contract pertaining to railways.
Final Conclusion: The ruling grants concessional treatment only where the statutory conditions of composite supply and works contract are satisfied, and confirms that the applicable rate continued unchanged from 1.1.2022.
Ratio Decidendi: A supply of civil works qualifies for the concessional railway-related GST entry only when it is established to be both a composite supply and a works contract involving original works pertaining to railways; absent such proof, the residual GST rate applies.
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