TaxTMI 
TaxTMI 
2021 (10) TMI 152
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....nion territory of Dadra and Nagar Haveli; that in the 2014 budget, Railway Minister Shri D.V. Sadananda Gowda announced the first bullet train and 9 High-Speed Rail routes'; that in 2016, the Ministry of Railways fast tracked the project and set up a Special Purpose Vehicle(SPV), named the National High Speed Rail Corporation limited(hereinafter referred to as NHSRCL) to build and operate the corridor; that the company was registered in January, 2016 in the name of Indian Railways and was registered under the Companies Act, 2013 on February 12, 2016 ; that a copy of the Memorandum, Articles of Association and Certificate of Incorporation has been enclosed as Annexure-1(Colly.); that NHSRCL, which is a special purpose vehicle responsible only for the implementation of the Mumbai Ahmedabad high-speed rail project has divided the total construction work for the project into 27 packages for which it has to award contracts separately; that NHSCRL issued a 'Letter of Acceptance'(LOA) in favour of RITES limited, RITES Bhawan No.1, Sector-29, Gurgaon-122001(hereinafter referred to as 'main contractor' or 'RITES', as the case may be) for 'shifting of existing railway infrastructure and othe....
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....f original works pertaining to railways so as to entitle it for charging of reduced rate of GST@12% instead of 18%." 5. The appellant has submitted that during the course of personal hearing, it was desired by GAAR that any documentary evidence from the main contractor or any other Railways agency to the effect that the said work pertains to Railways may be produced for further consideration of the application and accordingly, the appellant had submitted relevant documents for the same vide letter dated 24.06.2020, a copy of which is attached as Annexure-5; that GAAR disposed off the application vide order No. GUJ/GAAR/R/ 36/2020 dated 03.07.2020(copy attached as Annexure-6) (hereinafter referred to as the 'impugned order') wherein it was ruled that the aforementioned contract work is not covered under clause 3(v)(a) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.20/2017-Central Tax(Rate) dated 22.08.2017; that while deciding the application, GAAR segregated the discussion in three parts as mentioned in column(2) of the table below and answered as mentioned in column(3) below: S.No. Issue Decision Para Number of impugned ....
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.... 'pertaining to' is the word of expansion and this word came for consideration of Hon'ble Supreme Court in M/s. Doypack Systems Pvt. Ltd. vs. Union of India & Others (1988) 2SCC 299 =1988 (2) TMI 61, where the Court held that the above expression is an expression of expansion and not of contraction and the following has been laid down in paragraph 47 and 48:- "47.----------------We are of the opinion that the words 'pertaining to' and 'in relation to' have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method followed in good drafting. The word 'pertain' is synonymous with the word 'relate', see Corpus Juris Secundum, Volume 17, page 693. 48. The expression 'in relation to' (so also 'pertaining to') is a very broad expression which pre-supposes another subject matter. These are words of comprehensiveness which might both have a direct significance as well as an indirect significance depending on the context, see State Wakf Board v. Abdul Aziz (A.I.R.1933 All.649) and 76 Corpus Juris Secundum 621. Assuming that the investments in shares ....
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....g, Maharashtra in the case of M/s. Shree Construction reported as 2019 (3) TMI 1567 wherein Hon'ble authority held as under: "(10) We do not find any merit in the above mentioned contention of the Jurisdictional Officer as from the plain reading of the item(v) of the Sr.No.3 of the Notification, it is very much clear that any supply of works contract pertaining to the railways including monorail and metro is subject to concessional rate of 12% GST. In the instant case, though the GAAR i.e. M/s. Shree Construction is providing works contract services to its main contractor who has entered into works contract agreement with railways, the composite supply of works contract being carried out by M/s. Shree Construction is ultimately going to the use of railways without being subjected to any change or modification, thus the said works contracts, though undertaken by the subcontractor, is undoubtedly pertaining to the railways and no one else. Thus, the condition specified under item (v) of the Sr.No.3 of the said notification is completely fulfilled and therefore the services provided by the subcontractor would attract concessional rate of 12% GST. (11) As regards the ....
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.... or any other portion of a railway, for the public carriage of passengers, or goods, and includes- (a) All lands within the fences or other boundary, marks indicating the limits of the land appurtenant to a railway; (b) All lines of rails, sidings or yards, or branches used for the purpose of, or in connection with a railway; (c) All electric traction equipments, power supply and distribution installations used for the purpose of, or in connection with, a railway. (d) All rolling stock, stations, offices, warehouses, wharves, workshops, manufactories, fixed plant and machinery, road and streets, running rooms and rest houses, institute, hospitals, water works and water supply installations, staff dwellings and any other work constructed for the purpose of, or in connection with the railway; (e) All vehicles which are used on any road for the purpose of traffic of a railway and owned, hired or worked by railway; and (f) All ferries, ships, boats and rafts which are used on any canal, river, lake or other navigable inland waters for the purpose of the traffic or a railway and owned, hired or worked by a railway administration. ....
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....ed to appellant pertains to public carriage of passengers. B. Documentary evidence to substantiate the fact that contract granted to main contractor and that granted by main contractor pertains to railways, i.e. NHSRCL, a Special Purpose Vehicle created for the sole purpose of construction of Mumbai-Ahmedabad High Speed Rail Corridor, was submitted by appellant on 24.06.2020 which has been considered but not evaluated by the GAAR for their evidentiary value, therefore, impugned order is not supported by the reasons of rationality and liable to be set aside. (i) GAAR has answered the question asked by the appellant in negative on the basis of the following reasoning: "14.3.3 The applicant has produced no evidence that the work was allotted to M/s.RITES ltd. was pertaining to Railways as defined at section 2(31) of the Railway Act, 1989. There is also no evidence on record whether the work has been awarded in respect of 'Government Railway' or 'Non-Government Railway'. Although the applicant has sought to infer that the said work was in respect of railways owned by Ministry of Railways, but he has not provided any supporting evidence in the form of agreemen....
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....ering & Locomotive Co.ltd. vs. Collector of Central Excise, Pune, 2006 (203) ELT 360 (SC), the Supreme Court held that it is not sufficient in a judgement to give conclusions alone but it is necessary to give reasons in support of the conclusions arrived at. The court, set aside the order of the Tribunal as the findings recorded by the Tribunal were cryptic and non-speaking, and remitted the matter back to the Tribunal for taking a fresh decision by a speaking order in accordance with law after affording due opportunity to both the sides. (v) Impugned order shall be set aside and quashed being irrational because the evidentiary value of the submission dated 24.06.2020 has not been evaluated by the GAAR and no reasons in support of conclusion arrived in para 14.3.3 of the impugned order has been afforded. C.NHSRCL is incorporated with the sole objective of 'High Speed Rail Services' and is owned by the Ministry of Railways. Therefore, it is a 'Government Railway' and work allotted to the main contractor is pertaining to Railways, The 'Letter of Acceptance' issued by NHSRCL establishes that work is in respect of Railways. (i) As mentioned in facts of the ca....
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....and NHSRCL, attached as Annexure-2 to the appeal paperbook. As per letter No. NHSRCL/MA/CE01/RITESSTN/40.1/405 dated 04.10.2017, 'Letter of Acceptance' was issued by NHSRCL to the main contractor for shifting of existing Railway Infrastructure and other utilities in connection with Construction of Mumbai-Ahmedabad High Speed Rail Project. (v) For execution of the same work, main contractor had awarded the work of 'Construction of Pavement, Track work, Warehouse, Admin Building, E&M works and other miscellaneous works at Khodiyar, Gandhinagar, Gujarat' to the appellant vide work order no.Rites/RPOADI/NHSRCL/CONCOR/DCT-KHD/2018 dated 13.06.2018,copy of which is attached as Annexure-4. (vi) In order to further substantiate the fact that present work pertains to railways, appellant wrote a letter to the main contractor asking for clarification in relation to work given to them and taxability of works by the main contractor. The main contractor has replied vide letter dated 23.06.2020 as under: a) NHSRCL have given the work to main contractor for the shifting of existing Railway Infrastructure and Other Utilities at Sabarmati, Ahmedabad and Vadodara in connect....
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....llant vide their additional submission dated 19.10.2020 has submitted copies of a few case laws relied by them in their application for records: (i) Decision made by the Hon'ble Authority for Advance Ruling, Karnataka in the case of M/s. Quatro Rail Tech Solutions limited reported as 2019 (10) TMI 1134 as referred in Para A(iii) of the application on page no.13 of the paper book (attached as Annexure-I). (ii) Decision made by the Hon'ble Appellate Authority for Advance Ruling, Maharashtra in the case of M/s. Shree Constructions reported as 2019 (3) TMI 1567 as referred in Para A(vi) of the application on Page no.14 of the paper book (attached as Annexure II). (iii) Decision made by the Hon'ble Authority for Advance Ruling, West Bengal in the case of M/s. RITES limited reported as 2018 (12) TMI 1226 as referred in Para A(xiii) of the application on Page no.16 of the paper book(attached as Annexure III). (iv) As mentioned in Para 'C' of Grounds of Appeal on Page No.17 of the paper book 'NHSRCL' is incorporated with the sole objective of 'High Speed Rail Services' and is owned by the Ministry of Railways. Therefore, it is a 'government Railway' and ....
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....the GAAR. The Advance Ruling was sought for by the appellant to know 'whether the work done by them can be covered under clause 3(v)(a) of the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 i.e. Works Contract by way of construction, erection, commissioning or installation of original works pertaining to railways so as to entitle it for charging rate of GST@12% instead of 18%?' GAAR vide Advance Ruling No.GUJ/GAAR/R/36/2020 dated 03.07.2020 ruled that the said contract work is not covered under clause 3(v)(a) of the Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 as amended by Notification No.20/2017Central Tax(Rate) dated 22.08.2017 on the grounds that the 'Works Contract' does not pertain to Railways. The appellant has challenged the aforementioned order of the Advance Ruling authority. The issue in the present appeal filed by the appellant is restricted to establishing whether the present 'Works Contract' pertains to Railways or otherwise for which a reference is required to be made to clause 3(v)(a) of the Notification No.11/2017-Central Tax(Rate) dated 28.06.2017. 14. Entry No.3(v)(a) of the Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 ....
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....y'. Since there was no conclusive proof that the work pertains to railways, they found that the third condition above was not satisfied and accordingly ruled that the said contract work is not covered under clause 3(v)(a) of Notification No.11/2017-Central Tax(Rates) dated 28.06.2017 as amended by Notification No.20/2017-Central Tax(Rate) dated 22.08.2017. 15. We find that the appellant has submitted the following documents with regard to the work done by them: (i) Copy of Memorandum and Articles of Association of National High Speed Rail Corporation ltd. (ii) Letter of Acceptance No. NHSRCL/MA/CE01/RITES-STN/40.1/405 dated 03/04.10.2017 issued by NHSRCL to M/s. RITES ltd. regarding shifting of Existing Railway Infrastructure and Other Utilities in connection with construction of High Speed Rail Projects. (iii) Pages 1 to 4 of the Tender and Contract document issued by M/s. RITES ltd. regarding Construction of Pavement, Track work, Warehouses, Admin Building, E&M works and other miscellaneous works at Khodiyar, Gandhinagar, Gujarat. (iv) Letter of acceptance No. RITES/RPO-ADI/NHSRCL/CONCOR/DCTKHD/2018 dated 13.06.2018 issued by M/s. RITES ltd.....
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....oration ltd., the object clause of NHSRCL reads as under: "1. To plan, design, develop, build, commission, maintain, operate and finance High Speed Rail Services between the State of Maharashtra and State of Gujarat and/or for any other area either on its own or by taking over or leasing or otherwise on any other model and build new transit routes of any mode or a combination of modes with all attendant infrastructural facilities including but not limited to: i) Providing and/or facilitating provision of said rail infrastructure and other services including owning/licensing and operating rail, bus routes, passengers and goods carriers, other road vehicles and other modes of transport and providing seamless transportation services. ii) Upgradation, strengthening, doubling or conversion or any or all components of existing systems. iii) Electrification of systems including but not limited to traction and general power supply systems and public utility systems. ......................." 17.1 Thus, it is very much apparent from a plain reading of the above that the objective/work of NHSRCL is related to railways. Further, as per the detail....
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....lant also pertains to Railways only. Further, the appellant has also submitted a copy of certificate issued by the Principal Employer i.e. M/s.NHSRCL [under Rule-21(2) of the Contract Labour (Regulation & Abolition) Central Rules, 1971] under Form-III wherein it is mentioned that they have engaged M/s. J K Associates, M/s. Sanjeev Kumar Goyal Contractor & M/s. NMC Industries pvt.ltd.(JV) (the appellant) for work of construction of pavement, track work, warehouse, admin building, E&M work and other misc. works at Khodiyar, Gandhinagar, Gujarat to be carried out from 28.06.2018 to 27.04.2019. Also, as per the scope of work given as per the submission of the appellant as well as copy of Tender issued by M/s. RITES ltd., it appears that the work is pertaining to 'Railways'. Further, the term 'Railways' is defined under the section 2(31) of the Railway Act, 1989 and reads as under: "31. 'railway' means a railway, or any other portion of a railway, for the public carriage of passengers, or goods, and includes- (a) All lands within the fences or other boundary, marks indicating the limits of the land appurtenant to a railway; (b) All lines of rails, sidings or y....
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....ugh the above, we feel it prudent to refer to the meanings of some of the terms mentioned hereinabove, to find out their relation to Railways. However, since we do not find the definitions of any of the terms in the CGST Act, 2017, the CGST Rules, 2017 or the Railway Act, 1989, the same will have to be derived in generic terms or based on the Dictionary. To begin with, we will refer to the dictionary meaning of 'Trackwork'. As per Wordnik Dictionary, the meaning of 'Trackwork', is 'Construction or maintenance of railroad tracks', Further, as per Wikipedia, Track is explained as under: 'The track on a railway or railroad, also known as the permanent way, is the structure consisting of the rails, fasteners, railroad ties (sleepers, British English) and ballast (or slab track), plus the underlying subgrade. It enables trains to move by providing a dependable surface for their wheels to roll upon. For clarity it is often referred to as railway track (British English and UIC terminology) or railroad track (predominantly in the United States). Tracks where electric trains or electric trams run are equipped with an electrification system such as an overhead electrical power line ....