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2023 (3) TMI 423 - AAR - GSTClassification of supply - supply of goods or supply of services - activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned and supplied by the customer - applicable rate of GST - HELD THAT - Circular no. 52/26/18-GST dated 9th August, 2018 provides a clarification regarding applicability of GST on various goods and services which includes Bus Body Building as the supply of motor vehicle or job work - the contents of the circular issued by the Board are self-explanatory in nature. The advance ruling sought by the party gets squarely covered under Para 12.2 and 12.3 of the said circular. If the activity of fabrication and mounting of body is done on the chassis owned by applicant and using his own inputs capital goods, the same shall amount to supply of goods and shall merit classification under HSN 8707, attracting 28% of GST. On the contrary if the activity of fabrication and mounting of body is done on the chassis supplied by the customer using their own inputs capital goods amounts to supply of service, in terms of CBIC Circular dated 09.08.2018 and merits classification under SAC 9988, attracting 18% of GST.
Issues Involved:
1. Classification of the activity of building and fabricating Tipper Body and mounting it on the chassis supplied by the customer. 2. Applicable rate of GST if the activity is classified as a supply of goods. 3. Applicable rate of GST if the activity is classified as a supply of services. Issue-wise Detailed Analysis: 1. Classification of the Activity: The applicant, engaged in Tipper Body Building and Fabrication, mounts the fabricated body on the chassis supplied by customers. The primary question is whether this activity constitutes a supply of goods or services. The applicant argued that it should be classified as a supply of goods under Tariff item No. 8707, attracting 28% GST. However, Circular No. 52/26/18-GST dated 9th August 2018, clarifies that such activities, when performed on a chassis supplied by the customer, should be classified as a supply of services, attracting 18% GST. The circular distinguishes between building a bus body on a chassis owned by the builder (supply of goods) and building on a chassis provided by the customer (supply of services). 2. Applicable Rate of GST if Classified as Supply of Goods: If the activity involves building and fabricating the Tipper Body and mounting it on a chassis owned by the applicant, it is classified as a supply of goods under HSN 8707. This classification attracts a GST rate of 28%. This scenario occurs when the applicant uses their own inputs and capital goods for the fabrication process. 3. Applicable Rate of GST if Classified as Supply of Services: If the activity involves building and fabricating the Tipper Body and mounting it on a chassis supplied by the customer, it is classified as a supply of services under SAC 9988. This classification attracts a GST rate of 18%. This scenario occurs when the applicant uses their own inputs for the fabrication process but the chassis remains the property of the customer. Judgment Summary: The Advance Ruling Authority concluded that: - When the applicant builds and fabricates the Tipper Body and mounts it on a chassis supplied by the customer, and charges fabrication fees including the cost of inputs, the activity is classified as a supply of services under SAC 9988, attracting 18% GST. - When the applicant builds and fabricates the Tipper Body and mounts it on a chassis owned by the applicant, using their own inputs and capital goods, the activity is classified as a supply of goods under HSN 8707, attracting 28% GST.
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