BRIEF FACTS

The applicant, vide their application for Advance Ruling, has submitted that they are having factory at Survey No. 428/1, Village-Nana Fofalia, Dabhol, Vadodara, Gujarat-391210 engaged in the manufacture of Wear plats & Tampering tools specially manufactured as per RDSO specifications and used by Railways as a part of Ballast Cleaning Machine and Tie Tamping Machine.

2. The applicant further submitted that M/s Trio Enterprise having GSTIN: 24AFRPS0617P1ZU has got orders from Indian Railways to supply Wear plats & Tampering tools and the same order is given by M/s Trio Enterprise to the applicant as back to back order. Here, the applicant is instructed to manufacture wear plates and tamping tools as per RDSO drawing No. mentioned in the Work Order as given by M/s Trio Enterprise, for South Eastern Railway and also instructed to deliver the same to them.

2.1 In view of above backdrops, the applicant has put forward his question on which advance ruling is required, as under:

“Whether supply to be made by the applicant of Wear Plates and Tamping Tools as manufactured specifically as per RDSO Drawing directly to the Railway Authorities as per the Order received from M/s Trio Enterprise, should be fall under HSN 86040000 & classified under Chapter 86 and should be taxed GST @ 5%?”

3. Statement containing the applicant’s interpretation of law and/or fact:

3.1 The applicant submitted that they are involved in the manufacturing of Wear plats & Tampering tools specifically manufactured as per RDSO specifications and used by Railways as a part of Ballast Cleaning Machine and Tie Tamping Machine.

3.2 Wear Plates used in Ballast Cleaning Machine: Considering the vertical thrust coming on railway track, the track is required to be cushioned with specific size of ballast (Grit/ Kapachi) to transfer the vertical thrust to the soil. During working over the period of time, this ballast becomes rigid due to accumulation of fine dust, mud and sand particles and creating hurdles to maintain track up to the standard with use of track tampers, thus requires periodic cleaning and screening. Ballast Cleaning Machine is an important Track Maintenance Vehicle used to clean ballast. Ballast below track is removed by cutter bar and conveyed up to screens thru TURF (Red arrow marked line shows the movement of ballast) by chain. The TURF is lined with various wear plates as per machine design and due to continuous friction between ballast, wear plates and chain, the wear plates get wear out during working which needs to be replaced time to time to protect basic body of machine. As the machine cannot work without wear plates and BCM machine is a very important self-propelled track maintenance vehicle, wear plates of BCM should fall under HSN code 86040000 as a part of track maintenance vehicle.

3.3 Tamping Tool used in Tie Tamping Machine: Railway track is cushioned with ballast to absorb the vertical thrust generated by the train running on it with high speed. Due to continue jerks and vibration, it gets loose and unorganized which is required to be tamped time to time. Tie Tamping Machine is another self-propelled track maintenance vehicle which does ballast tamping work and Tamping Tools is the key component of machine which get wear out after few days of working due to friction between ballast and tools. These tools required being replaced time to time to keep the machine and in turn the railway track working. As tamping tool is important part of this self-propelled track maintenance vehicle, it should fall under HSN code 86040000.

3.4 The applicant submitted the extracts of Chapter 86 and HSN-8604 00 00, as under:

“Chapter 86: Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds

HSN-8604 00 00: Railway or Tramway Maintenance or Service Vehicles whether or not Self Propelled (For Example, Workshops, Cranes, Ballast Tampers, Track Liners, Testing Coaches and Track Inspection Vehicles)”

3.5 From above, it is very clear that both the items, i.e. Wear Plates and Tamping Tools are specifically manufactured for and used by Railways and should fall under Chapter 86.

3.6 The applicant has lastly submitted that as the order is given by M/s Trio Enterprise to the applicant on back to back basis and also supply is to be made by the applicant directly to the Railways only. To justify the same, they have attached the copy of the Work Order as received by M/s Trio Enterprise from Railways and the copy of the Work Order as issued by M/s Trio Enterprise to the Applicant.

4. At the time of personal hearing held through Video Conferencing on 09.07.2020, the Authorised Representative of the applicant, CA Rachit Shah, reiterated the facts as stated in the Application.

5. The applicant, vide their letter dated 11.07.2020 stated that during the last hearing conducted on 09-07-2020 through Whatsapp calling in which they have been asked to provide various details and photographs of the product specific along with the RDSO drawings on the basis of which the said products are manufactured and the justification regarding usage of the product is only limited to Railways only. Accordingly, their further submission is as below:

PHOTOGRAPHS OF THE PRODUCTS:

A. TAMPING TOOL – USED IN TIE TAMPING MACHINE:

6. Railway track is cushioned with ballast to absorb the vertical thrust generated by train running on it with high speed. Due to continue jerks and vibrations it gets loose and unorganized which is required to be tamped time to time. Tie tamping machine is another self-propelled track maintenance vehicle which does ballast tamping work and Tamping Tools (As shown in figure) is the key component of the machine which gets wear out after few days of working due to friction between ballast and tools. These tools required being replaced time to time to keep the machine and in turn the railway track working. As tamping tool is an important part of this self-propelled track maintenance vehicle, it should fall under HSN code 86040000.

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