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12% GST applicable to Manufacturing and Supplying of Railway parts: AAR

  • | Divita S Gupta

The Karnataka bench of the Authority of Advance Ruling has held that a GST rate of 12% is applicable on the manufacture and supply of Railway parts including knuckles, toggles, locks, yokes, etc. The applicant is involved in the manufacture and supply of various steel castings, automobile parts, valves, etc and contractually supplies parts to a vendor who in turn supplies parts to the Indian railways. These supplies are classified under HSN 8607 which falls under the category of a tax rate at 5%. The applicant sought an advance ruling on the classification of specific parts such as Couplers, Knuckle, Locks, Toggles, Yokes etc. and the applicable GST rate on their supply. 

In their submission, the applicant stated that the impugned goods are liable to be classified under HSN 7325 at the rate of 18% when they supply it to their vendor. The vendor who in turn supplies the parts to the Indian railways after assembly. However, this is now classified under HSN 8607 or HSN 7325 as other cast articles of Iron or Steel. The AAR held 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. This is now replaced by entry number 205 G of Schedule II and now the rate of GST is 12%,  with no refund of unutilized input tax credit.


Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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