Clarification on Goods Supplied to Indian Railways

Circular No. 30/4/2018-GST

F.No.354/1/2018-TRU Government of India Ministry of Finance Department of Revenue (Tax Research Unit) *****

North Block, New Delhi Dated, 25 January, 2018

To

Principal Chief Commissioners/Principal Directors General, Chief Commissioners/Directors General, Principal Commissioners/Commissioners, All under CBEC.

Madam/Sir,

Subject: Clarification on supplies made to the Indian Railways classifiable under any chapter, other than Chapter 86 – regarding.

Representations have been received that certain suppliers are making supplies to the railways of items classifiable under any chapter other than chapter 86, charging the GST rate of 5%.

2. The matter has been examined. Vide notification No. 1/2017 –Central Tax (Rate) dated $28^{\text{th}}$ June, 2017, read with notification No. 5/2017-Central Tax (Rate) dated $28^{\text{th}}$ June, 2017, goods classifiable under Chapter 86 are subjected to 5% GST rate with no refund of unutilised input tax credit (ITC). Goods classifiable in any other chapter attract the applicable GST, as specified under notification No. 1/2017 –Central Tax (Rate) dated $28^{\text{th}}$ June, 2017 or notification No.2/2017-Central Tax (Rate) dated $28^{\text{th}}$ June, 2017.

3. The GST Council during its $25^{\text{th}}$ meeting held on $18^{\text{th}}$ January, 2018, discussed this issue and recorded that a clarification regarding applicable GST rates on various supplies made to the Indian Railways may be issued.

4. Accordingly, it is hereby clarified that

• only the goods classified under Chapter 86, supplied to the railways attract 5% GST rate with no refund of unutilised input tax credit and
• other goods [falling in any other chapter], would attract the general applicable GST rates to such goods, under the aforesaid notifications, even if supplied to the railways.

Yours faithfully,

(Mahipal Singh) Technical Officer (TRU) Email: mahipal.singh1980@gov.in