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TMI Blog2021 (12) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of the principal issued to the applicant that there is mention of value of chassis, GST amount and total amount. It indicates that the ownership of chassis has been transferred to the applicant by the principal. Moreover, Tax Invoice issued by the applicant to the principal has mention of description of goods along with Body Serial No. as well as charging GST Rate of 28%. As such, it is clear that there is supply of the body of the vehicle in the said transaction. The fact gets pretty clear when circular in situation 12,2(b) refers that body builder recover fabrication charges including certain material that was consumed during the process of job work. However, in the instant case, the dominant character of work relates to supply of goods rather than supply of service. As such, this case is not covered under circular No. 52/26/2018-GST dated 09-08-2018. All inputs required for fabrication of vehicle-body (Tippers, Trailers, Truck, Tankers) on chassis are procured by the applicant and fabricated vehicle-body mounted on the chassis is supplied by the applicant - Therefore, in the instant case, it is a supply of body of the vehicle and the activity of fitting/mounting of veh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c are received on free of cost basis, under the delivery challan. Hence the ownership of chassis always remains with the principal. (c) The applicant is engaged in job work in terms of Section 2(68) of GST Act 2017 in relation to building and mounting of body on chassis (d) accordingly it is charging GST @ 28% (CGST @14% + UPGST @14%) as per the Serial No.169 of schedule IV to the notification No.01/2017- Central Tax (Rate) dated 28.06.2017, on treating their supply as that of goods (e) The CBIC vide Para 12.3 of circular no 52/26/2018-GST dated 09.08.2018 clarified that in the case as mentioned at para 12.2(b) of the said circular, if the body is fabricated on the chassis provided by the principal (not on account of body builder), then the supply -would merit classification as service and attract 18% GST. (f) The activity of applicant of mounting of body on chassis of trucks is entirely identical to that which is mounted on chassis of buses. The applicant is engaged in building and mounting of body on the chasis of Tippers, Trailers, Tankers provided by the Principal which requires fabrication, welding, painting etc and therefore the same amount to manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing issues on which advance ruling required- (1) classification of any goods or services or both; (2) applicability of a notification issued under the provisions of this Act; (7) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. We find that the issue raised in the application is squarely covered under Section 97(2) of the CGST Act 2017. We therefore, admit the application for consideration on merits. 10. We have gone through the submissions made by the applicant and have examined the same. We observe that the applicant has sought advance ruling on the following questions- I. Whether the body building activity on the chasis provided by the principal would amount to manufacturing services attracting 18% of GST. II. Whether clarification of CBIC vide para no. 12.3 of Circular No. 52/26/2018-GST dated 09.08.2018 clarifying 18% rate of GST in respect of building of body of buses would also apply in the case of applicant. 11. The applicant is engaged in building and mounting of body on the chasis of Tippers, Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity of bus body building on job work basis is 18%. As such, the body building on job work basis is pre-requisite for applicability of GST rate of 18%. As per Section 2 (68) of the CGST Act, 2017, Job work means any treatment or process undertaken by a person on goods belonging to another registered person and the expression job worker shall be construed accordingly . The definition of Job Work has three major limbs which is the basis for classifying any supply under the scope of Job Work i.e. i. Treatment or Process ii. By any Person on Goods iii. Belonging to another Registered Person. 14. We find that the applicant has submitted in Form ARA-01 that the process for body building and mounting of the body involves procurement of miscellaneous inputs such as steel sheets, square tubes, windows, glasses, wiring harness, fittings inside body, paints, automobile parts from the principal. Thus, it is amply clear that the applicant builds the body on chassis by purchasing all materials required for body building of the vehicle. The applicant is receiving only chassis and all inputs/materials required for fabrication of the body has to be used by the applicant from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of bus body building there is supply of Thus, classification of this goods or services? composite supply, as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case. 17. The relevant provisions of the CGST Act, 2017 are as under- (i) As per Sec. 2(30), composite supply means supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply . (ii) As per Sec. 2(90), principal supply means, the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary . (iii) Sec. 8(a) determines tax liability on composite supply, which reads as under :- The Tax liability on a composite or a mixed supply shall be determined in the following manner, namely:- A composite supply comprising two or more supplies, one of which is a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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