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2022 (12) TMI 1289 - AAR - GSTBenefit of concessional rate of GST - Supply of works contract to the Indian Railways - construction services - classified under Entry 3(v)(a) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 or not - HELD THAT:- The entry 3(v)(a) of Notification No. 8/2017-lntegrated Tax (Rate) dated 28.06.2017 prescribes the rate of 12% for Composite supply of works contract {as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017}, other than that covered by items (I), (ia), (ib), (ic), (id), (ie) and (if) of the above notification supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro. Immovable property has not been defined in the CGST Act. Definition of Immovable Property is given in Clause 3 (26) of General Clauses Act, 1897 which says that "immovable property shall include land, benefits arising out of land and things attached to earth, or permanently fastened to anything attached to earth. " - As per Section 3 of the Transfer of Property Act 1882, the phrase "attached to earth" means- (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. The goods involved in repair and maintenance of 'open line' as well as in 'construction line' are welding material and paints are consumed purely during the execution of contract and hence the same shall not be treated as 'transfer of property in goods', as lawful convey and absolute transfer of ownership of the said property i.e. consumable goods does not take place. The supply provided by the applicant does not fall under the category of 'new construction' as the applicant is not doing any work relating to new construction. Even in case of work relating to 'construction lines' wherein new railway tracks are constructed, the applicant is not constructing new railway line and only supplying completion and finishing services in respect of 'construction lines' wherein the applicant has to provide welding work and painting work - The supply provided by the applicant do not fall under the category of ' all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable' in case of construction lines. Even in case of Open Lines, the railway lines which are replaced on completion of shelf life are not abandoned or damaged structures. Further, there is no erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise during execution of contracts by the applicant. As such, the applicant is not entitled to benefit of entry 3(v)(a) of Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 because- (i) there is no contract for building, construction, fabrication, completion, erection, Installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property, (ii) there is no transfer of property in goods (whether as goods or in some other form) involved in the execution of contracts and (iii) The supply is not by way of construction, erection, commissioning, or installation of original works. The appropriate rate of IGST payable by the applicant on services provided on 'construction line' as well as 'open line' is 18%.
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