9911796707
TMI Blog2022 (9) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 activity of fabrication and mounting of bus body on the chassis supplied by the owner of chasis i.e. Principal on delivery challan and collecting job work charges including inputs required for such fabrication work merits classification under SAC 998882 - Other transport equipment manufacturing services . Thus, the applicant activity of fabrication and mounting of Tanker and Tripper on the chasis supplied and owned by the principal is supply of Service. The rate of tax in both the cases if chasis is supplied by the registered person (principal) i.e. having GSTIN and un-registered person (principal) i.e. not having GSTIN would be 18% as per Entry No. 26 (ic) and 18% as per Entry No. 26(iv) respectively. This activity merits classification SAC 998882 'O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f GST, would be 18% in terms of Entry No. 26(ic) (iv) of Notification No. 11/2017 CT(Rate) and submitted as under : a) In cases where the chassis is provided by a Registered Person - Rate of tax 18% Entry number 26 in Notification No. 11/2017 Central Tax (Rate) as amended vide Notification No. 20/2019 Central Tax (Rate) dated 30.9.2019 specifies the rate of 18% in case the services are in the nature of job-work. The relevant entries are reproduced below: 3 4 5 (ic) Services by way of job work in relation to bus body building; 9 (iv) Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id),(H), (iia) and(Hi) above. 9 (i) The term 'bus body building' has been defined as building of body on chassis of any vehicle falling under chapter 87 by virtue of Explanation which was inserted vide Notification No. 26/2019 CT(Rate) and the same reads as under: Explanation - For the purposes of this entry, the term bus body build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 classifiable under 'Job-work' services in case the goods are received from Registered person and 'Other Manufacturing Services' in case the goods are received from Unregistered person. 4. The applicant has submitted that they are physically receiving the goods i.e. Chassis owned by the Principal which are registered in some cases and not registered in some cases. Thereafter, they are undertaking the activity of fabricating the tanker, tipper, etc. and mounting the same on such chassis. With regard to the activity undertaken by them, they are charging the job-charges which include the charges of fabrication of Tanker, Tipper, etc. and mounting of the same on the chassis owned by the Principal. The cost of raw materials used for fabrication of Tanker, Tipper, etc. is included in the said job charges raised under tax invoice. 4.1 The applicant has submitted that the activity undertaken by it is supply of services. 5. The applicant submits that the activity undertaken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The applicant has submitted that their activity is falling under the category of supply of services in view of the above clarification in as much as they are undertaking the activity of bus body building on the chassis owned by the Principal. c) The applicant cited following Advance Rulings: (i) M/s AB N Dhruv Autocraft (India) Pvt. Ltd. reported at 2020 (41) GSTL 383 (AAR-Gujarat) (ii) Advance Ruling in the case of M/s SLN Tech-Fabs (Bengaluru) Pvt. Ltd. reported at 2020 (34) GSTL 290 (AAR-GST-Kar) (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 Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 corresponding similar provisions in the GGST Act. 11. We note that the prime facie issue before us is to determine the classification of the activity of bus body building on chasis owned by the principal undertaken by the applicant and subsequently HSN and Tax rate on the such supply. 12. We find that the applicant is engaged in the building bodies of various vehicles falling under Chapter 87 of the First Schedule to the Custom Tariff Act such as mounting of tankers, tippers etc. on chassis provided by the owner (principal) of such chassis. The chassis are received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 : Representations have been received seeking clarifications on GST rates on the activity of bus body building. The doubts have arisen on account of the fact that while GST applicable on job work services is 18%, the supply of motor vehicles attracts GST @ 28%. 12.2 Buses [motor vehicles for the transport of ten or more persons, including the driver] fall under headings 8702 and attract 28% GST. Further, chassis fitted with engines [8705] and whole bodies (including cabs) for buses [8707] also attract 28% GST. In this context, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 classification of the Service is as reproduced as under: SI.No. Chapter, Section, Heading or Group Service Code (Tariff) Service Description 498 Heading 9988 Manufacturing services on physical inputs (goods) owned by others 534 Group 99888 Transport Equipment Manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chasis 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . motor vehicle GST rate will be 28% [CGST-14% + SGST-14%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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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