The West Bengal Authority for Advance Ruling ( AAR ) has held that the execution work by Railway for dismantling of existing sleeper fixing and/or installation of new H-BeamSteel sleepers is not composite supply of ‘original work’.
The applicant, Utkarsh India Limited, was awarded a contract by EastCoast Railwaysfor execution work for dismantling of existing sleeperfixing and/or installation of new H-BeamSteel sleepers. The application is made before AAR for clarifying whether the execution work amounting to execution of original work and would attract IGST at12% in terms of Notification No. 20/2017.
The applicant submits that the work is pertaining to Railways and the work involves dismantling of existing bridge timber/steel channel sleepers and fabrication,manufacture and supply of galvanized H-Beam Steel Sleepers made out of materials as per specification. The said works contract is being carried out by way of construction, erection, commissioning or installation of original works. Since it is not a case of completely new construction and the work is not in the nature of repair and maintenance, the instant work can only be considered under the category of original works.
The Coram of Mr Brajesh Kumar Singh, Joint Commissioner, CGST and Mr JoyjitBanik, Senior Joint Commissioner, SGST has observed that the applicant is found to be involving both supply of goods and services which comprises of, inter alia, fabrication, manufacturing, supply of galvanized sleepers and fitting out of the same. Further, the work is relating to railway bridge which is an immovable property and the supply made by the applicant is found to be covered under the definition of works contract under section 2(119).
The Authority further observed that the applicant doesn’t construct a new bridge nor is the applicant entrusted to lay a new railway track. The applicant, undertakes the work of replacing the old sleepers with new one which essentially requires dismantling as well as removal of existing sleepers first. Further observed that the composite supply of works contract cannot be considered as ‘original work’ in terms of definition given in clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate).
The Authority has held that “the instant supply is found to be a composite supply of works contract as defined in clause (119) of section 2 of the GST Act but the supply cannot be regarded as composite supply of ‘original work’ as defined in clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate). The instant supply, therefore, shall not be covered under serial number 3(v) of Notification No. 20/2017 Integrated Tax (Rate), as amended, to attract tax @ 12%.
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