9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 481 - AAR - GSTClassification of supply - supply of goods or supply of services - Classification code - activity of tanker body building on job work basis, on the chassis supplied by the customer - applicable rate of GST - HELD THAT - The applicant is collecting the charges for the activity which includes the cost of inputs / material used by the applicant and the labour charges for fabrication of the body. Thus it is evident that the applicant is fabricating body on the chassis belonging to the customer. The ownership of the chassis remains with the customer and at no stage of the process of fabrication of the body, the title in the chassis is transferred to the applicant. Therefore, the applicant is fabricating the body on the chassis belonging to another person and hence the activity is squarely covered under Para 3 of Schedule II of the CGST Act, 2017 as a treatment or process which is applied to another person's goods and accordingly is a supply of services. Classification of the activity - rate of GST applicable - HELD THAT - As per the Scheme of Classification of Services notified as Annexure to Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 the Heading Service Accounting Code - 9988 pertains to manufacturing services on physical inputs (goods) owned by others - the value of the services in this Heading is based on the service fee paid, not the value of the goods manufactured. SAC - 99888 under Heading 9988 pertains to Transport equipment manufacturing services and Sub - Heading 998881 pertains to Motor vehicle and trailer manufacturing services. Therefore, the activity of the applicant as discussed above is appropriately classifiable under Service Accounting Code 998881. The activity is liable to GST at the rate of 18% as per entry at SI No. 26 (iv) - 9988 - Manufacturing services on physical inputs (goods) owned by others - Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
Issues:
1. Determination of whether the activity of tanker body building on a job work basis, on the chassis supplied by the customer, constitutes a supply of goods or a supply of service. 2. Applicable rate of GST if the activity is considered a supply of goods. 3. Applicable rate of GST if the activity is considered a supply of services. 4. Classification of the service code (tariff) for the activity of tanker body building carried out on the chassis of a motor vehicle owned by the customer. Analysis: 1. The applicant contended that the activity of fabricating tanker bodies on chassis provided by customers should be treated as a supply of service under Paragraph 3 of Schedule II of the CGST Act, 2017. They argued that there is no transfer of ownership of the chassis, making it a service. The jurisdictional officer agreed that the activity is a supply of service covered under SAC Code 9988, attracting 18% GST. 2. The Authority determined that the applicant's activity of building tanker bodies on customer-supplied chassis constitutes a supply of service under Para 3 of Schedule II of the CGST Act, 2017. The ownership of the chassis remains with the customer throughout the fabrication process, leading to a conclusion that the activity is a service provided on another person's goods. 3. The Authority further classified the activity under Service Accounting Code 998881, which pertains to manufacturing services on physical inputs owned by others. The applicable GST rate was determined to be 18% (9% CGST + 9% SGST) as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. 4. The ruling issued by the Authority confirmed that the activity of tanker body building on customer-owned chassis is a supply of service and falls under Service Accounting Code 998881 for classification purposes. The applicable GST rate for this service was set at 18% as per the relevant notification. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Authority's decision on each matter raised by the applicant.
|
