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TMI Blog2022 (9) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... olts, etc. The steel sheets are then cut and bent as per the required dimensions and the bended edges are joined through the process of welding. In this manner, all the required parts are independently fabricated and then assembled to obtain the Tanker, Tipper, etc. Such tankers, tippers, etc. are then mounted on the chassis owned by the Principal. 3. The applicant has submitted that the activity undertaken by them is in the nature of working upon the goods i.e. chassis supplied by the Principal and converting the same into a Mounted Tanker, Tipper, etc. Therefore, the activity, as per their understanding, would be in the nature of supply of services. As per the Scheme of Classification of services in the Annexure to Notification No. 11/2017 Central Tax (Rate) and corresponding SGST/ IGST Notifications, their services would be covered under the main head of 9988 which reads as under: "Manufacturing services on physical inputs (goods) owned by others" The sub-group would be 99888 i.e. Transport equipment manufacturing services further classifiable under Service Code 998882 i.e. Other transport equipment manufacturing services. 3.1 The applicant has submitted that the applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11/2017 Central Tax (Rate) as amended vide Notification No. 20/2019 Central Tax (Rate) and the applicable rate would be 18%. 3.2 The applicant submitted that the above position has also been clarified under Circular No. 126/45/2019-GST dated 22.11.2019 and the relevant text of the clarification is as follows: In view of the above, it may be seen that there is a clear demarcation between scope of the entries at item (id) and item (iv) under heading 9988 of Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017. Entry at item (id) covers only job work services as defined in section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person. On the other hand, the entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under the CGST Act. (i) It is submitted by the applicant that the above clarification expressly indicates that the activity of manufacturing services on physical inputs owned by others would be classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , working on the chassis owned by him and supplies the built-up bus to the customer, and charges the customer for the value of the bus. (b) Bus body builder builds body on chassis provided by the principal for body building, and charges fabrication charges (including certain material that was consumed during the process of job-work). 12.3 In the above context, it is hereby clarified that in case as mentioned at Para 12.2 (a) above, the supply made is that of bus, and accordingly supply would attract GST @ 28%. In the case as mentioned at Para 12.2(b) above, fabrication of body on chassis provided by the principal (not on account of body builder), the supply would merit classification as service, and 18% GST as applicable will be charged accordingly. b) Answer to Question No. 27 in the sectoral FAQs published by the CBIC https://www.cbic .gov.in/resources//htdocs-cbec/gst/Final-G ST-FAQ-31218 is read as under: Q27. Whether activity of bus body building, is a supply of goods or services? Ans. The classification would depend on which supply is the principal supply. In case, a bus body building company builds on the chassis owned by it and sells the completely built buses, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the category of Supply of Services? (2) If yes, the applicable accounting code of such services as per the Scheme of Classification of Services and the applicable rate of GST thereon. Personal Hearing: 7. Personal hearing (virtual) granted on 8-7-22 and 2-8-22 was attended by Shri Hem Chhajed, CA and he reiterated the submission. Revenue's Submission: 8. Revenue has neither submitted its comments nor appeared for hearing. FINDINGS: 9. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made by authorised signatory, during the personal hearing proceedings on 2-8-22 before this authority. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant's interpretation of law. 10.. At the outset we would like to make it clear that the provisions of CGST Act and GGST Act are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the correspo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njunction with each other in the ordinary course of business, one of which is a principal supply". 13.2 As per Section 2(68) of the CGST Act, 2017 and as per para 3 of the Schedule II of the CGST Act 'any treatment or process which is applied to goods of another person's is a supply of service.' 13.3. In the instant case we find that the applicant is carrying out the activity of mounting/fabrication of body on the chasis supplied by the principal. Accordingly, such activity would be supply of service as principal supply. Section 8(a) of CGST Act, 2017 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 principal supply, shall be treated as a supply of such principal supply; and" 14. Now, We find that the activity and question raised before us has been suitably clarified and dealt with Circular No. 52/26/2018-GST dated 9-8-18 issued by Government of India. The relevant Para 12 of the said circular is read as under: 12.1 Applicable GST rate for bus body building activity : R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is as under Q27. Whether activity of bus body building, is a supply of goods or services? Ans. The classification would depend on which supply is the principal supply. In case, a bus body building company builds on the chassis owned by it and sells the completely built buses, it would be supply of goods. On the other hand, if the company builds the body on the chassis belonging to some else, it would be supply of services. 16. Now, for classification of the supply of service by the applicant, we refer to the Annexure attached to the Not. No. 11/2017-CT (Rate) dated 28.06.2017. As stated above, the applicant is engaged in the manufacturing of body building i.e. mounting of tanker, tripper on the chasis supplied by the owner of the chasis. Therefore, the said service would be classified under Service Accounting Code 9988 -Manufacturing Service on Physical Inputs (Goods) owned by others". -Manufacturing services on physical inputs (goods) owned by others". The sub-group would be 99888 i.e. Transport equipment manufacturing services further classifiable under Service Code 998882 i.e. Other transport equipment manufacturing services. The relevant entry Sr. No. 498 of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owned by them, such activity is covered under the description "Manufacturing services on physical inputs (goods) owned by others" as appearing at Sr. No. 26(iv) of Notification No. 11/2017 Central Tax (Rate) as amended vide Notification No. 20/2019- Central Tax (Rate) and the applicable rate would be 18%. 17.3 We find that the above position has also been clarified under Circular No. 126/45/2019-GST dated 22.11.2019 and the relevant text of the clarification is as follows: In view of the above, it may be seen that there is a clear demarcation between scope of the entries at item (id) and item (iv) under heading 9988 of Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017. Entry at item (id) covers only job work services as defined in section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person. On the other hand, the entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under the CGST Act. 17.4 The abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (C) What will be the Service Code (Tariff) for above stated activity of body building carried out on another person's chassis of motor vehicle? Ans: The activity of body building carried out on another person's chasis of motor vehicle is classifiable under SAC 9988. In case of supply of complete built-up motor vehicle on owns chasis is classifiable under CTH 87 (depends upon type of vehicle supplied (ii) Advance Ruling in the case of M/s SLN Tech-Fabs (Bengaluru) Pvt. Ltd. reported at 2020 (34) GSTL 290 (AAR-GST-Kar) The case under consideration in the above matter was the activity of fabrication of Tippers/ Trailers on the chassis provided by the Principal and the following ruling was given: RULING (1) Charging of GST 28% (CGST @ 14% + SGST @ 14%) as per Sl. No. 169 of Schedule-IV to the Notification No. 1/2017-C.T. (R), dated 28-6-2017 is correct, if the activity of the applicant is treated as supply of goods, falling under Chapter Heading 8707. (2) The activity of fabrication of body building on Tippers, Trailers etc., merits classification under SAC 998881, under "Motor vehicle and trailer manufacturing services", in terms of SL No. 535 of Annexure to Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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