18% GST On Supply Of Reconstruction, Maintenance, Housekeeping And Security To Railways: AAR
18% GST On Supply Of Reconstruction, Maintenance, Housekeeping And Security To Railways: AAR
The Maharashtra Authority of Advance Ruling (AAR) has ruled that 18% goods and service tax (GST) is payable on supply of reconstruction, maintenance, housekeeping and security to railways.
The bench of D. P. Gojamgunde and Priya Jadhav have observed that the applicant is providing supply of services such as works contract service, repairs and maintenance, housekeeping services and security services to the Central Railway which can be considered as a supply of mixed service, with works contract (repairs and maintenance) having the highest rate of tax of 18%.
Central Railway introduced a scheme under which private players would reconstruct Goods sheds and maintain the same for 10 years. Private players would have to invest the entire capital cost for reconstruction. No upfront payment would be paid by Central Railway for suchcapital expenditure.
The private player also has to maintain and upkeep the goods shed during the entire contract period. Terminal charges are collected by Central Railway for inward and outward traffic of goods at the Goods shed in addition to freight charges (for transportation of the goods by rail applicable to the goods.
Central Railway has awarded contract to Fly Ash Movers for reconstruction, maintenance, housekeeping and security at Kalamboli Goods shed near Panvel for 10 years for which 90% terminal charges collected by Central Railway from its clients will be paid to Fly Ash Movers as consideration on a monthly basis.
The applicant sought the advance ruling on the issue in respect of the classification and GST Rate applicable to the work undertaken by the applicant of "Reconstruction, Maintenance, housekeeping and security at Kalamboli Goods Shed near Panel for 90% proportion of terminal charges a consideration".
The AAR held that the services provided by the applicant will be classified as mixed supply with works contract (repairs and maintenance) services classifiable under Heading 995419 having the highest rate of tax of 18%.
Ruling Details
Applicant Name: M/s. FLY ASH MOVERS INDIA PRIVATE LIMITED
Date: 27/03/2025
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
