TMI Blog2021 (10) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... line, it is found that Rail India Technical and Economical Services limited (RITES ltd.)is a Public Sector Undertaking wherein ownership of the Government of India(72.02% in equity shares). As per Wikipedia, RITES Ltd, is an engineering consultancy company, specializing in the field of transport infrastructure. Established in 1974 by the Government of India, the company's initial charter was to provide consultancy services in rail transport management to operators in India and abroad. RITES has since diversified into planning and consulting services for other infrastructure, including airports, ports, highways and urban planning. On going through the work mentioned at Sr.No.1,2 and 3 (of Phase-I works), it appears that the same pertains to construction of the railway track, pavements alongside it as well as and high mass lighting on the pavement along the track. Similarly, Sr.No.1 and 2 (of Phase-II works) appears to pertain to construction of warehouse as well as construction of Balance Pavement area like area around warehouse and connecting road between pavement near the track and pavement around warehouse. Further, EIMWB mentioned at Sr.No.3 of Phase-II works above, sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation 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 other utilities in connection with construction of High Speed Rail Projects , the copy of which is attached as Annexure-2. 3. The appellant submitted that on 09.03.2018, the main contractor further sub-contracted the work and invited tenders from eligible sub-contractors for Construction of pavement, Track work, Warehouses, Admin Building, E M works and other miscellaneous works at Khodiyar, Gandhinagar, Gujarat and copy of relevant part of tender is attached as Annexure-3; that on 13.06.2018, main contractor issued LOA in favour of the appellant for Construction of pavement, Track work, War ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 order (1) (2) (3) (4) 1. Whether the contract is a composite supply of Works Contract? Yes. 14.2 2. Whether the work is a construction, erection, commissioning or installation by way of construction, erection, commissioning or installation of original works? Yes. 14.1 3. Whether it pertains to railwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le if the composite works contract is supplied for original works pertaining to railways; that the word 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is placed on the decision given by Appellate Authority for Advance Ruling, 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven below: 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 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 railw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 agreement between M/s. RITES limited and Ministry o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03) 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 case, in 2016, the Ministry of Railways fast tracked the project and set up a Special Pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance 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 connection with construction of High Speed Rail Projects. b) Main contractor raises the invoice to NHSRCL at the rate of 12%. A copy of this letter was submitted be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 10. The appellant has furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 as amended by Notification No.20/2017-Central Tax(Rate) dated 22.08.2017and further amended vide Notification No.03/2019-Central Tax(Rate) dated 29.03.2019 reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of agreement between M/s. RITES ltd. and Ministry of Railways was produced to establish the same; that there was no evidence on record whether the work has been awarded in respect of Government Railway or Non-Governmental Railway . 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, Wareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of Railways, Government of India, for the development and implementation of the high speed rail projects in India. As per the Memorandum and Articles of Association of National High Speed Rail Corporation 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce M/s.RITES ltd. has issued the Letter of Acceptance to the appellant based on the above contract only, it is very much apparent that the work allotted to the appellant 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) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther miscellaneous works as per requirement. 18.2 On going through 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 el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity for Advance Ruling, Karnataka in the case of M/s. Quatro Rail Tech Solutions limited reported as 2019 (10) TMI 1134. (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 (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 , to support their contention. We would like to emphasize here that decisions of Advance Ruling Authorities cannot be relied upon by the appellant, since, as per the provisions of Section 103 of the CGST Act, 2017, the Advance Ruling pronounced by the Advance Ruling Authority or the Appellate Authority shall be binding only on the applicant who had sought it in respect of any matter referred to in sub-section(2) of Section 97 for Advance Ruling and the concerned officer or the jurisdictional officer in respect of the applicant. 20. In view of the foregoing, we, allow the appeal filed by the appellant M/s.SKG-JK-NMC Associates(JV), Gandhinagar and modify the Advance Ruling No. GUJ/GAAR/R/36/2020 dated 03.07.2020 issued by the GAAR, by holding that the ..... 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