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TMI Blog2022 (10) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... the body, the title of 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 Il 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. The Explanatory Notes to the Scheme of Classification of Services states that the services included in the Heading 9988 - Manufacturing services on physical inputs owned by others are services performed physical inputs owned by units other than the units providing the service. As such, they are characterized as outsourced portions of a manufacturing process or a complete outsou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Kerala State Goods and Services Tax Act, 2017 (hereinafter referred to as KSGST Act) are the same except for certain provisions. Accordingly, a reference hereinafter to the provisions of the CGST Act, Rules and the notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules and the notifications issued there under. 3. The applicant requested an advance ruling on the following: 3.1. Whether the activity of commercial vehicle's body building on job work basis, on the chassis supplied by the customer, is supply of goods or supply of services? 3.2. If it is a supply of goods, what is the applicable rate of GST? 3.3. If it is supply of services, what is the applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the business activity will fall within SAC 9988, is manufacturing services on physical inputs (goods) owned by others. Further in support of their contentions, the applicant also places reliance on the Circular No.52/2018, wherein applicable GST rate for bus body building is classified The circular clarifies bus body fabrication in 2 situations as follows. a) Bus body builder, working on a chassis owned by him and supplies the built bus to the end customer and charges the customer for the value of the bus. ln this situation, supply made is that of the bus and attracts 28% GST. b) Bus body builder, builds on chassis provided by the principal for body building and realize fabrication charges, including certain materials that wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule Il of the CGST Act, 2017 which lists out the activities or transactions to be treated as supply of goods or supply of services; any treatment or process which is applied to another person's goods is a supply of service. In the instant case the applicant is building body of commercial vehicles for carrying of goods on the chassis supplied by the customer as per specifications of the customer. 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 st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 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. 7.4, Accordingly, the activity is liable to GST at the rate of 18% [9% CGST + 9% SGST] as per entry at Sl 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. Given the observations stated above, the following rulings are is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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