TaxTMI 
TaxTMI 
2022 (5) TMI 1493
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....d u/s 19) of the COST Act, 2017; Whether the rate of CST for the construction of rail infrastructure facilities will be under 3. No. OR Sl. No.3(xii) Notification No 11/2017-CT(Rate) dated 28/06/2017 as amended by various notifications as applicable and the said work can be considered as works contract pertaining to railways including monorail and metro? 2. Facts of the case: - 2.1 That the applicant is a private incorporation involved in works contract services. 2.2 That the work has been awarded by M/S Rites Limited, which is a Public Sector Undertaking owned by the Ministry of Railways, Government of India. Further, the same is covered under Section 2(31) of the Ralways Act, 1 989. 2.3 That RITES LIMITED for and on behalf of South Eastern Coalfields Limited, (SECL), Gevrahas awarded the following work to the applicant vide letter of acceptance issued on 25.10.2021 ; "Earthwork in formation, minor bridges, P. Way Linking work including supply of Track Ballast, PSC sleepers, P.Way Fittings, Points and Crossings, Drain, Road, FOB Geotechnical investigation etc. in connection with the proposed feeder line of East West Rail Corridor within the lease hold boundary of Project for....
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....ing of track, Box Culverts, Major Bridges, Supply of P-Way Materials work as per layout plan, Construction of side drain cutting area works. Therefore, the applicant is of the understanding that ail the said work as mentioned in the scope of work are in the nature of new work to be executed and, thus, covered under the definition of original work as defined in dause (zs) of said Notification and the work awarded can be considered as original work. Thus, it was the contention of the applicant that the scope of work as outlined by the applicant is that of works contract, as defined under Section 1 9) of the CST Act, fit to be called an "original work" and hence is taxable @1 2%. 3.4 Applicant further opined that in order to avail the reduced rate of CST levy @ 1 2% in terms of clause of the Notification No. 11/2017-CentraI Tax (Rates), following conditions are required to be fulfilled: (a) the work should be works contract (b) it should be an original work (c) the work should pertain to railways, including monorail and metro. 3.5 The said work has been awarded by M/S Rites Limited, which is a Public Sector Undertaking owned by the Ministry of Railways, Government of India. ....
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....ssions have I, the meanings hereby respectively assigned to them, that is to say (20) railway does not include (a) a tramway wholly within a municipal area, or (b) any other line Of communication wholly situate in one State and declared by Parliament by law not to be a railway: Article 366(20) of the Constitution clearly states the exemptions under the definition of railways. The Parliament excludes by law, apart from the tramways, the lines of rails mentioned under Section of the Railways Act, 1989, being rails built solely for the purpose of recreation. Therefore, it is concluded that the construction of rail infrastructure facilities for the proposed feeder line of East West Rail Corridor at Gevra Open cast of Gevera Area of SECL that the applicant refers to, doesn't fall under the exemptions stated under Article 366(20) of the Indian Constitution and pertains to "railways" 3.8 That we hereby quote following rulings by AAR : * Ruling by the Authority for Advance Rulings. West Benqal 27/WBAAR/2018-19-Case No. 28 of 2018 dated 21.12.2018 in RE: RITES Limited, wherein it has been ruled: "that construction of a private railway siding for carriage of a coal and oil....
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....uested by them and accordingly, Shri Sandip Agrawal advocate and legal representative of the Applicant appeared before us for hearing on 09.03.2022 and reiterated their contention. He also furnished a written submission dated 13.01.2022 along with sample copies of work order which has been taken on record. 5. The legal position, analysis and discussion: At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh CST Act, 201 7 [hereinafter referred to as "'the CGST Act and the CGGST Act"] are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 201 7. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. 6. Section 96 of CCST Act, 201 7, Authority for advance ruling, stipulates as under: - Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under. the provisions of a State Goods and Services Tax Act or Union Territory Goods....
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.... sub-section (I), [sub-section (3) and subsection I of section 9, sub-section (1) of section Il, sub-section (5) of section sub-section (1) of section 16 [and section 148] 3 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:- TABLE Sl. No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) I Chapter 99 All Services 2 Section 5 Construction Services 3 Heading 9954 (Construction services) (i) Construction Of a complex, building, civil structure or a part there of including a complex or building intended or sale to a ....
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....other residential buildings such as old age homes, homeless shelters, hostels and the like 7 995413 Construction services of industrial buildings such as buildings used for production activities (used for assembly line activities), workshops, storage buildings and other similar industrial buildings 8 995414 Construction services of commercial buildings such as office buildings, exhibition and marriage halls, malls, hotels, restaurants, airports, rail or road terminals, parking garages, petrol and service stations, theatres and other similar buildings 9 995415 Construction services of other non-residential buildings such as educational institutions, hospitals, clinics including veterinary clinics, religious establishments, courts, prisons, museums and other similar buildings 10 995416 Construction services of other buildings nowhere else classified 11 995419 Services involving repair, alterations, additions, replacements, renovation, maintenance or remodeling of the buildings covered above 12 Group 99542 General construction services of civil enineering works 13 995421 General construction services of highw....
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.... signs, etc.; vi. creation, maintenance and signposting of tracks and paths; vii. painting services of markings on roads, parking lots and similar surfaces; viii. railway roadbeds for long-line and commuter rails, street tramways and underground or elevated urban rapid transit systems; ix. railway electrification structures including laying services of ballast and rails; x. installation services of switch gear, points and crossings; xi. construction services of control and safety systems for railway tracks; xii. construction services of funicular railways and cable car systems: xiii. construction services for airfield runways, including taxiways, aprons and related airport structures other than buildings; xiv. construction of bridges, highway, road and railway tunnels and tunnels for underground railway traffic 7.4 In the instant case under consideration, the applicant has submitted the copy of letter of acceptance dated 25.10.2021 issued by RITES LIMITED addressed to the applicant, for and behalf of SECL vide e-Tender No. 31 /OT/SECL-Gevra Cast/CiviI/ & P.Way /PKG-lI/21 dated 1.3.2021 . Besides this from the submissions as put forth by the applicant it is seen f....
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....al Investigation. Thus, there exist all reasonable grounds to hold that natural bundle of supply of goods and services are present and are supplied in conjunction with each other in the ordinary course of business. The supply thereof is construed to be made when the entire supply is made. Thus, we come to the considered conclusion that the second criterion of '"composite supply" stands fulfilled in the case in hand. 7.6 Now we move on the third criterion of the work being "'Works Contract", essential for availing the claimed exemption as provided under S.No. 3(v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, vide Notification 01/2018 Central Tax (Rate) dated 25.01.2018. We find that under the scheme of things as envisaged under GST law, the definition of "Works Contract" has been restricted to any work undertaken for an "lmmovable Property" unlike the erst while VAT and Service Tax provisions where works contracts for movable properties were also considered. The Works Contracts has been defined in Section 2(119) of the CGST Act, 2017 as "works contract" means a contract for building, construction, fabrication, completion, erection, in....
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....t be moved and cannot be detached or dismantled from the land or earth and further that dismantling of the same would render it defunct / redundant. Immovable property would include in its ambit land and the things which are attached to or embedded in the land such as buildings, bridges etc. However not everything that is attached to the land would automatically constitute an immovable property. Whether the particular property is an immovable property or not is subject to the peculiar facts of each case. Hon'ble courts have pronounced various judicial pronouncements laying down certain criteria for determining whether a property is immovable or not. From these decisions, it can be derived that an immovable property would consist of the following characteristic - It should be permanently attached to or affixed to the earth. It should come into existence as an immovable property, It cannot be shifted from one location to other location without dismantling it. In other words, only individual parts can be shifted and property as such cannot be shifted. The dismantling of the property would cause substantial damage to the said property. T....
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....act' as per Section 2 (1 19) of CGST Act, 2017. 7.7 The other prerequisite to be satisfied in the instant case is that the supply should be by way of construction, erection, commissioning, or installation of original works' pertaining to railways, including monorail and metro. Original work is defined in Para 2(zs) of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as follows: "original works" means- all new constructions; (i) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (ii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise: From the submissions before us by the applicant, and in view of the elaborate discussions above regarding the work undertaken by the applicant as is forthcoming from the "letter of acceptance" supra, it is seen that the work awarded to the applicant are 'Original work' as defined in the notification. Further, on a thorough look into the text of the claimed exemption as provided under S.no. 3(v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, vide Notific....
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....llation of original works pertaining to monorail or metro were exempt till 1-3-2016. Thereafter, the said services provided under a contract entered into prior to I-32016 were exempt. Exemption to the said services was withdrawn in Budget, 2016 with a view to minimize exemptions in the run up to GST as exemptions break ITC chain, increase cost and result in distorted tax structure. However, GST rate on most of the services provided to the Govt. which were exempted under service tax has been reduced from 18% to 12% so as to reduce cost of Govt. projects. Service of transportation of passengers by a monorail or metro rail has been exempted under GST so as to reduce the cost of supply of the said public transportation service . to the public. Reduced rate of GST of 12% has been extended to services provided for construction of railways, road, bridge, tunnel or terminal for road transportation for use by general public vide notification No. 20/2017-CT(R) dated 22nd August, 2017. The same reduction in GST rate from 18% to 12% can be considered for construction of metro and monorail projects (construction, erection, commissioning or installation of original works). Fitment Decision Agree....
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....oundary of Project for Coal Evacuation through Rail at Gevra Opencast at Gevra Area of SECL". Further, the said letter of acceptance mentions that the offer of the applicant has been accepted by the competent authority of RITES LIMITED for & on behalf of SECL (South Eastern Coal Fields Limited). Whether the phrase "'public carriage of passenger or goods" prevents a proposed feeder line of East West rail Corridor from being included in the definition of 'railways' has repeatedly come up for judicial scrutiny involving the issue akin to the case in hand. The courts generally held that the phrase 'public carriage of passengers or goods' cannot be constæed in such manner as to exclude from the ambit of 'railways' other works related to Railway. (Cases relied upon: DMRC v. Municipal Corporation of Delhi, 2008 (103) DRJ 369 (Delhi High Court); Commissioner, Central Excise, Raipur v. Anand Construction,2017 (51) S.T.R. 435 (CESTAT, Principal Bench, New Delhi); SMS Infrastructure Ltd. v. Commissioner, Central Excise, Nagpur, 2017 (47) S T.R. 17 (CESTAT, west Zonal Bench, Mumbai)] Art. 366(20) of the Constitution excludes from the ambit of 'railwa....
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.... of the considered opinion that the work being entrusted to the applicant through the said letter of acceptance dated 25.10.2021 by RITES Limited pertains to railways and accordingly this pre-requisite also stands fulfilled. 7.9 As regards the applicant's reference to the various rulings of Advance Ruling Authorities in their defense, we would again like to cite reference to section 103 of CGST Act, 201 7 wherein it has beeh stipulated that the said rulings under the CGST Act, 2017 would be binding only on the applicant and on the concerned officer or the jurisdictional officer. Accordingly, the cited Advance Ruling are applicable only to the applicant parties and the ratio of the same cannot be generalized. 7.10 In view of the above discussions we are of the considered view that it would be appropriate to conclude that the benefit of the entry at Sl.no. 3(v)(a) would be eligible to M/S Triveni Engicons Private Limited Flat No.- 3, B-BIock, Mehta Bhawao, First Floor, Kalindi Kunj, Sarangarh Road, Raigarh, Chhattisgarh, 496001 [GSTlN-22AABCT4589RIZN], the applicant, subject to the fact that the works undertaken by them are 'Works Contract' as per Section 2(119) of the ....