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2023 (1) TMI 975 - AAR - GSTClassification of supply - supply of goods or supply of services - activity of Bus Body Building on the chassis supplied by the customer on job work basis - applicable rate of GST and its SAC/HSN code - HELD THAT - In the instant case, it is observed that the bus body is fabricated and mounted by the Applicant on the chassis owned and supplied by the customer. After completing the work, it is delivered back to the customer, charging a lump sum amount as Job Work Charges. The ownership of the chassis remains with their customers and will not be transferred to the Applicant at any point of time. The consideration is received only towards fabrication services besides some materials involved in the course of fabrication. In the case of IN RE M/S. TVL ANAMALLAIS ENGINEERING (P) LTD. 2021 (8) TMI 732 - AUTHORITY FOR ADVANCE RULING, TAMILNADU , it was held that the activity of Bus body building undertaken on the chassis supplied by the customers amounts to supply of service as per Schedule II clause 3 of CGST Act 2017. The service rendered was classified under SAC 998881 and the applicable rate will be CGST @ 9% and SGST @ 9% as per entry no.26 of Notification No.11/2017-Central Tax (Rate) dt.28.06.2017(as amended) and Sl.No,26 of Notification No.11(2)/ CTR/532(d- 14)/2017 vide G.O.(Ms)No.72 dated 29.06.2017 (as amended) respectively. - The facts and circumstances of the instant case are similar and there are no reason to deviate from the decision taken in the order. The Bus body building on the chassis supplied by the customer is a service under SAC 998881, Motor Vehicle and trailer manufacturing services and 18% GST as applicable will be charged accordingly - it is evident that the activity undertaken by the Applicant for bus body building on the chassis supplied by the customer is to be classified as job work. As per Schedule II (3) of the CGST Act 2017, the said activity bus body building on the chassis belonging to the customer by the applicant is supply of services.
Issues Involved:
1. Whether the activity of Bus Body Building on the chassis supplied by the customer on a job work basis is a supply of service or supply of goods. 2. If it is a supply of service, what is the applicable rate of GST and its SAC code. 3. If it is a supply of goods, what is the applicable rate of GST and its HSN. Detailed Analysis: 1. Nature of Supply: The Applicant, a Proprietrix Concern engaged in bus body building, sought a ruling to determine whether their activity of bus body building on customer-supplied chassis constitutes a supply of service or goods. The Authority examined the process where the Applicant receives chassis from customers, fabricates the bus body as per specifications, and returns the completed bus. The Applicant contended that this activity qualifies as job work, thus constituting a supply of services under the CGST Act, 2017. The relevant legal provisions include: - Section 2(68): Defines "Job work" as any treatment or process undertaken by a person on goods belonging to another registered person. - Schedule II, Clause (3): Specifies that any treatment or process applied to another person's goods is a supply of services. - Explanation to Section 143: Clarifies that for job work, input includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job worker. The Authority concluded that the activity of bus body building on the customer-supplied chassis is a supply of services, as the ownership of the chassis remains with the customer and the Applicant only provides fabrication services. 2. Applicable GST Rate and SAC Code: The Applicant referenced previous AAR rulings and a CBIC Circular (No. 52/26/2018-GST, dated 09.08.2018) which clarified that bus body building on a customer-supplied chassis is a service attracting 18% GST. The service is classified under SAC 998881 - "Motor vehicle and trailer manufacturing services." The Authority reiterated that the activity falls under SAC 998881 and attracts 18% GST (9% CGST and 9% SGST), as confirmed by the Circular and previous rulings. 3. Supply of Goods and Applicable Rate: Since the activity was determined to be a supply of services, the question of it being a supply of goods and the applicable HSN did not arise. Conclusion: The Authority ruled that the activity of bus body building on the chassis supplied by customers is a supply of service under SAC 998881, attracting 18% GST (9% CGST and 9% SGST). The ruling is binding unless the law, facts, or circumstances change, and any appeal against this ruling must be filed within 30 days.
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