Classification of service— In the instant case, the applicant is seeking advance ruling regarding applicability of GST Rate of 12% on receipt of contract for new construction of CBD railway station, platform, parking, building and all other civil constructions within the boundary of the station, as per Entry No.3(v) of Notification No.11/2017- Central Tax (Rate) Dated 28 June 2017.

In the instant construction project being undertaken by the applicant there is neither any involvement of 'Government railway” nor any “non-Government railway”. Just because construction of a CBD Railway station including commercial complexes/buildings is being undertaken by the applicant, on purely commercial consideration on the basis of a “letter of acceptance cum work order” issued by Chief Executive Officer, Nava Raipur Atal Nagar Vikas Pradhikaran, Raipur does not entitle the work as being categorized as a construction project “pertaining to railways” or for that matter works constructed for the purpose of, or in connection with, railway.

Held that— 

For the said work of construction undertaken by the applicant till 17.7.2022, the applicability of Sl.no. 3 (v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is subject to the fact that the works undertaken by them are “Composite supply” as defined under Section 2 (30) of the CGST Act, 2017 and on getting established that there is transfer of property in goods (whether as goods or in some other form) involved in the execution of such contract for it being “works contract” as stipulated under Section 2 (119) of the Central Goods and Service Tax Act, 2017, which as discussed has been found not to have been adhered by the applicant. In addition to above, as the said construction work undertaken by the applicant has been found not pertaining to railways, the same attracts GST @ 18% [9% CGST + 9% CGGST] under the residual entry at Sr. no. 3 (xii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, as amended.

Further, with effect from 18.7.2022, as the exemption claimed by the applicant under Sr. no. 3 (v)(a) ibid stands omitted, in view of the amendments made in Notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 vide Notification no. 03/2022 dated 13th July 2022, the construction services undertaken by the applicant would accordingly attract GST @ 18% [9% CGST 9% CGGST) under the residual entry no. Sr. no. 3 (xii) of Notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended supra on 13.7.2022.