AAR Karnataka: Fixed GST Rate 12% for Manufacturing and Supplying of Railway parts.

GST at the rate of 12% must apply for the manufacture and supply of the Railway parts including knuckle, toggle, lock, yoke, says the ruling of the Authority of Advance Ruling (AAR) Karnataka’s bench.

An application was filed by M/s Prragathi Steel Castings Pvt. Ltd. under Section 97 of CGST Act,2017 and KGST Act,2017 to Authority of Advance Ruling (AAR) Karnataka bench regarding the classification of certain parts such as Couplers, Knuckle, Locks, Toggle, Yoke, etc. and the applicable GST rate thereon.

 M/s Prragathi Steel Castings Pvt. Ltd. deals in the manufacturing and supply of various steel castings, automobile parts, valves etc., and currently it supplies the parts to M/s Sanrok Enterprises, Faridabad, as per the specifications demanded by them, who in turn supply the same to the Indian Railways, on classifying the said goods under HSN 8607 & on discharging the GST @5%.

In the application, the applicant said, “The impugned goods are liable to be classified under HSN 7325 and the applicable rate of GST is 18%. Hence the applicant filed the application, seeking advance ruling on the question: 

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?”

So the authority keeping in view of these questions asked by the applicant and based on its discussions and findings gave the ruling that 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 June 28, 2017, till October 29, 2019, is now replaced by entry number 205 G of Schedule II and now the rate of GST is 12%. Also, the ruling said that no refund of unutilized Input Tax Credit (ITC) should be given.

With Warm Regards,

CL Bureau.