Material Supply to Railway HSN 8533 or 8607

[Pushkar Gupta]

Dear Sir

Our client are selling material which is parts of locomotive products and control panel which is listed in HSN code 8533 & 8537 under GST and rate of tax is 18% & 28%.

As per our understanding If Locomotive products and control panel are supplied to Railway will be covered under HSN 8602 & 8607 and rate of Tax is 5 %. Please advise on the same if material supplied to Railway and what will be rate of tax.

Pushkar Gupta

 

[RAMESH PRAJAPATI]

Goods are classified as per their Name & technical specification. Consumer of goods cannot influence the classification. Client has correctly classified control panels under HSN 8537 and Electrical Resister under 8533.

[Pushkar Gupta]

Dear Sir

It is specified under Rate Schedule of GST for Railway Locomotive & parts Under HSN from 8601 to 8608 are covered under Rate Schedule 5% if they are supplied to directly Railway.

If Products are Locomotive parts and directly billed to Railway, what is rate of GST.

Please advise.

[Ganeshan Kalyani]

I agree with Sri Ramesh Ji. The items are classified in the rate schedule provided in Notification 1/2017-CT (Rate). The HSN which you have mention has items related to Railway. It does not mean all the items supplied to Railway will cover under 5% rate. The item has to be referred as such without linking its supply.

[Rajagopalan Ranganathan]

Sir,

Heading 8533 & 8537 relate to electrical machinery and equipment and parts thereof. heading 8602 relates to other rail locomotive, locomotive tenders such as Diesel-electric locomotives, steam locomotives and tenders thereof. heading 8607 relates to parts of railway or tramway locomotives or rolling stock such as Bogies, bissel-bogies, axles and wheels and parts thereof.

Parts of railway locomotives are specifically covered by headings 8602 and 8607. Rate of gst is 5%.

[KASTURI SETHI]

There is no doubt about GST @5% as opined by Sh. Ranganathan, Sir.

[SHARAD DESHPANDE]

Dear Sir,

If we supply the material to Railway Coach Factories with GST@ 5% then what about ITC ? Can we claim full ITC or will it be restricted to 5% only.

AI Summary

Goods classification determines GST rate; locomotive parts under railway headings attract lower tax if they meet heading definitions. Goods classification for GST depends on the intrinsic name and technical specifications of the item, not the purchaser. Items that meet the descriptive scope of railway locomotive or rolling stock headings qualify for the lower railway rate when supplied to the railway; however, goods classified under electrical machinery headings remain so even if sold to a railway. Not all supplies to a railway automatically receive the railway heading rate. A related query concerns whether input tax credit is fully available where supplies to a railway are taxed at the lower rate.