The GST Appellate Tribunal’s Agra Bench restored a ₹72.82 lakh demand on a joint venture that charged 12% on earthwork and bridge works for North Central Railway.
The GST Appellate Tribunal, Agra, has held that the concessional 12% rate under Serial No. 3(v)(a) of Notification No. 11/2017-Central Tax (Rate), as amended by Notification No. 20/2017-Central Tax (Rate), applies to construction services for Railways only if the supplier shows they are a composite supply of works contract. The Bench of Ajeet Singh, Member (Judicial), who wrote the order, and Vivek Kumar, Member (Technical), allowed the Department’s appeal [Commissioner State Tax v. Arss Sips, 2026-juristway.com-3248-GSTAT(Agra)-GST].
The respondent, a registered joint venture, carried out earthwork in embankments, drains, retaining walls, minor and major bridges and signal and cable works for North Central Railway in 2019-20. It billed ₹12,13,74,088 and paid GST at 12%. A show cause notice under Section 74 treated the work as general construction services under SAC 995423 and 995424 taxable at 18%, and a demand of ₹72,82,446 was confirmed.
The first appellate authority held that the services were works contracts relating to immovable property supplied to a Government entity, taxable at 12%, and quashed the demand. A separate demand of ₹43,248 on other income was confirmed and was not before the Tribunal.
The Bench noted that the respondent’s own invoices described the services as general construction services. It held that the concessional rate requires the taxpayer to demonstrate, with billing breakups and supporting material, that the supply is a composite works contract in relation to immovable property. As the respondent had not done so, the services defaulted to the standard rate of 18%.
The Bench termed the finding that all railway construction services are works contracts at 12% legally untenable. It set aside the order-in-appeal dated 16 Jan 2026 and restored the order-in-original dated 28 Jun 2025.
2026-juristway.com-3248-GSTAT(Agra)-GST
