TMI Blog2023 (1) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... person - In the case in our hand, we find that the contract awarded to the applicant is not limited to any treatment or process (the process of welding for the instant case) on goods belonging to another person. The scope of work as it is noticed from the work order covers the entire job for conversion of SWR to LWR including replacement of existing AT welds for a total distance of 54.03 km by flash butt welding. The work requires pulling back of rail, unfastening of fittings, lifting of rail with wooden block, opening out PSC sleepers either side of joints, removing of ballast, squaring, re-spacing and reinsertion of sleepers, putting back ballast, checking of joint sleeper, re-fixing of fittings etc. The instant services, therefore, falls under Tariff Code 995429 and to be taxed @ 18% vide serial number 3(xii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time [ corresponding West Bengal State Notification No.1135 F.T. dated 28.06.2017]. - WBAAR 18 of 2022 Order No. 17/WBAAR/2022-23 - - - Dated:- 22-12-2022 - MR BRAJESH KUMAR SINGH, AND MR JOYJIT BANIK, MEMBER Applicant s representative heard : Mr. Shubham Khaitan, C.A, Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant is that of a Job Worker, falling under Heading 9988 [(Manufacturing services on physical inputs (goods) owned by others) Sr. No26 (id) i.e Services by way of job work other than 78b[(i), (ia), (ib), (ic) and (ica)] above; having tariff rate of 12% under Notification No. 11/2017-Central Tax (Rate) as amended. d. If the services do not fall under any of the above categories, what should be the HSN code and GST rate? 1.4 The aforesaid question on which the advance ruling is sought for is found to be covered under clause (a) of sub-section (2) of section 97 of the GST Act. 1.5 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act. 1.6 The officer concerned from the Revenue has raised no objection to the admission of the application. 1.7 The application is, therefore, admitted. 2. Submission of the Applicant 2.1 The applicant submits that pursuant to a contract awarded to M/s Patil Rail Infrastructure Pvt. Ltd, (hereinafter referred to as the principal contractor ) by the Engineering Department of Northeast Frontier Railway for conversion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST Act defines the term works contract which reads as follows: works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Further, clause (52) of section 2 defines the term goods as under: Goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. However, the term immovable property has not been defined under the GST law. Therefore, references may be drawn to other laws and judicial precedents in this regard which are as follows: Section 3(26) of General Clauses Act, 1897 defines immovable property as under: immovable property shall include land, benefits to arise out of land and things attached to the earth, or permanently fastened to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk whereas labour supply would be ancillary. Hence, the rate of GST would be the same as that of job work. 2.8 In the light of aforesaid arguments, the applicant submits that the supply of services provided by them would attract tax @ 12% vide serial number 26(i)(id) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time. 3. Submission of the Revenue 3.1 The concerned officer from the revenue has not expressed any view on the issue raised by the applicant. 4. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representatives of the applicant during the course of personal hearing. 4.2 The applicant, as a sub-contractor, undertakes the work for conversion of Short Welded Rails ( SWR ) to Long Welded Rails ( LWR ) by Flash Butt Welding process. It is contended by the applicant that since the welding services are provided on railway tracks which can be easily detachable from the earth without any damage and no goods are transferred in the services involved, such services should not be treated as works contract as defined in clause (119 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails ( LWR ) by Flash Butt Welding process and it is argued by the applicant that railway tracks, on which the activities of welding is carried out, would fall under the category of movable property since the railway tracks are easily detachable from the earth without any damage and thereby would qualify as goods. 4.6 Since the term immovable property has not been defined under the GST law, the applicant has drawn references to other laws which inter alia includes section 3(26) of General Clauses Act, 1897 which defines immovable property as under: immovable property shall include land, benefits to arise out of land and things attached to the earth, or permanently fastened to anything attached to the earth. 4.7 For the purpose of interpretation of the expression attached to the earth , section 3 of the Transfer of Property Act, 1882 may be referred to which reads as follows: attached to the 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; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Apex Court observed that attachment of the plant in question with the help of nuts and bolts to a foundation intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth. The court further held that manufacture of the plants in question do not constitute annexation hence cannot be termed as immovable property for the following reasons: (i) The plants in question are not per se immovable property. (ii) Such plants cannot be said to be attached to the earth within the meaning of that expression as defined in Section 3 of the Transfer of Property Act. (iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free. (iv)The setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed. 4.10 In the case at hand, there can be no dispute in this regard that the intention of annexation of railway tracks involves significant degree of perman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken on goods only. 4.12 We also find that the definition of job work is restricted to any treatment or process only i.e., the activities of a job worker is to undertake any treatment or process on goods which belongs to another registered person. In the case in our hand, we find that the contract awarded to the applicant is not limited to any treatment or process (the process of welding for the instant case) on goods belonging to another person. The scope of work as it is noticed from the work order covers the entire job for conversion of SWR to LWR including replacement of existing AT welds for a total distance of 54.03 km by flash butt welding. The work requires pulling back of rail, unfastening of fittings, lifting of rail with wooden block, opening out PSC sleepers either side of joints, removing of ballast, squaring, re-spacing and reinsertion of sleepers, putting back ballast, checking of joint sleeper, re-fixing of fittings etc. 4.13 The authorized representatives of the applicant, in course of personal hearing, have made a request to clarify whether the supply of labour for the process of welding would be considered as a standalone supply or ancillary to the compos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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