Court Buzz, GST

Karnataka AAR rules on the classification and rate of railway parts.

Case: Prragathi Steel Castings Pvt. Ltd.

Forum: Karnataka AAR

Facts

The Applicant is involved in manufacture and supply of various steel castings, automobile parts, valves etc. The instant application is with regard to the classification of certain parts such as Couplers, Knuckle, Locks, Toggle, Yoke etc., The Applicant, supplies the aforesaid parts to M/s Sanrok Enterprises, Faridabad, who in turn supply the same to the Indian Railways, on classifying the said goods under HSN 8607 86 on discharging the The Applicant stated that a consultant opined that the impugned goods are liable to be classified under HSN 7325 and the applicable rate of GST is 18%.

Hence the Applicant filed an application, seeking advance ruling on the whether: Railway parts such as Couplers, Knuckle, Locks, Toggle, Yoke etc., manufactured and supplied by us to our buyer Sanrok Enterprises (who in turn supply to Indian Railways after assembly) be classified under HSN 8607 or to be classified under HSN 7325 as other cast articles of Iron or Steel?

Key points

The Applicant submitted that the impugned goods are manufactured as per the pre-determined drawings of Indian Railways, on placement of order by M/s Sanrok Enterprices (buyer), Faridabad, who are the main contractors for supply of the impugned goods. Further the buyer of the impugned goods have given an affidavit that the said goods supplied by the applicant are in turn supplied only to Indian Railways & the said goods are not useful for anyone other than the Indian Railways and thus the impugned goods are suitable for use solely with the Railway Locomotives. It was observed from the photographs submitted by the Applicant that the goods are suitable only for coupling the railway bogies/wagons.

The Authority further held that the impugned goods (parts of coupling device) are suitable for use solely with the Railway Locomotives and thus can be classified specifically under HSN 8607.

The applicable rate of GST on the impugned goods is 5% in terms of entry number 241 of Schedule I to the Notification No.1/ 2017-Central Tax (Rate) dated 28.06.2017, till 29.09.2019 and effective from 30.09.2019, the rate of GST is 12%, in terms of entry number 205 G of Schedule II to the Notification No.1/ 2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No.14/ 2019 – Central Tax(Rate) dated 30.09.2019, with no refund of unutilized input tax credit, in terms of Sl.No.14 of Notification No.5/2017-Central Tax (Rate) dated 28.06.2017.

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