Order Date – 23 January 2023

Facts –

• The Applicant M/s SK Swamy and Company has entered into a contract with Konkan Railway Corporation Limited for supplying and stacking of ballast at Thokur ballast depot, loading into KRCL hoppers for CTR (P) works under AEN/ Udupi in the jurisdiction of Senior Regional Engineer, Karwar.

Issue –

• Whether GST payable on works contract executed to Indian Railways?

Order –

• The AAR held that works contract services supplied by the Applicant to Indian Railways such as construction of Rail under bridge and construction of tunnels are covered under entry No. 3(xii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and is exigible to GST at 18%(SGST @ 9% and CGST @ 9%) if the Applicant is providing the services either as a main contractor or as a sub-contractor to main contractor.
• Supply of works contract services involving predominantly earth work (more than 75% works contract), which is covered under entry No. 3(vii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, as a sub-contractor to the main contractor who is covered under entry No.3(vii), the same is covered under entry No. 3(x) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and is exigible to GST at 12% (SGST @ 6% and CGST @ 6%)
• Supplying and stacking of ballast at Thokur ballast depot, loading into KRCL hoppers for CTR (P) works under AEN / Udupi. That is the applicant is supplying ballast to the Konkan Railway Corporation Limited and the supply of ballast to railways is exigible to GST at 5% (CGST @ 2.5% and SGST @2.5%) (HSN 2517) as per entry No. 126 of Schedule I of Notification No. 1/2017-Central Tax (Rate), dated: 28.06.2017.