Maintenance and repair services provided to railways

[Praveen Kumar]

Dear readers, does providing repair and maintenance services in respect of railway wagons to railways / RITES etc., fall under 'MMRS' and liable to service tax? Can exemption be claimed under Notification No.24/2009-ST as amended by 54/2010-ST or under Mega notification no.25/2012-ST? Or any other exemption notification...please advise.

[Padmanaban M]

Hi Mr. Praveen Kumar,

Repair and Maintenance work for railways are not exempted from the Service Tax.  As per the mega exemption notification (25/2012) only the original work is exempted for Railways, roads etc.,  The original work meaning is given below:

Explanation 1.- For the purposes of this rule,-

(a)  "original works" means-

(i)  all new constructions;

(ii)  all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable;

(iii)  erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise;

As refer by you the principal notification of 24/2009 was rescinded vide notification no 34/2012 - Dt. 20.06.12, hence the said notification is not valid now.

So, the Railways are not exempted for Repair and Maintenance work.

M.Padmanaban

[Praveen Kumar]

Hi Shri M.Padmanaban,

Wish you a Happy New Year and thank you for the prompt reply. Would I be right in assuming that the said service was exempted prior to the rescinding of the Notification No.24/2009-ST?

The Notification No.24/2009-ST as amended by 54/2010-ST exempts MMRS services in respect of roads, railways etc. Now, does the word 'railways' include all railway property (Indian Railways as a whole) or only the railway lines and related paraphernalia like signals, electric lines etc. (excluding rolling stock)?

Thank you once again.

Praveen Kumar

AI Summary

Service tax on railway maintenance: repair and upkeep of wagons are taxable; exemption limited to original works. Repair and maintenance services for railways, including wagon repairs, are not exempt and are subject to service tax because the exemption is confined to original works-new constructions, specified additions or alterations to structures, and erection or installation of plant or equipment. A prior notification that extended MMRS relief was rescinded, so earlier broader exemptions no longer apply; repair and upkeep are outside the defined exempt category.