9911796707
TMI Blog2023 (3) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and mounting of body is done on the chassis supplied by the customer using their own inputs capital goods amounts to supply of service, in terms of CBIC Circular dated 09.08.2018 and merits classification under SAC 9988, attracting 18% of GST. - MS. VARINDER KAUR, AND MR. VIRAJ SHYAMKARN TIDKE, MEMBER (An Appeal against this order lies with the Appellate Authority in terms of Section 99 and Section 100 of the CGST Act, 2017 and Section 99 and Section 100 of the PGST Act,2017 within a period of thirty days from the date of communication of this order.) PROCEEDINGS The present application has been filed under Section 97 of the Central Goods and Service Tax, 2017 and the Punjab Goods and Service Tax Act, 2017 [hereinafter referred to as the CGST Act and PGST Act ) by M/s Raj Agro Aids, GSTIN: 03AFIPS6804F1ZJ, Lalheri Road, Khanna-141401, the applicant, seeking Advance an advance Ruling in respect of the following questions.- a) Whether the activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned and supplied by the customer will result in supply of goods or supply of services? b) If it is supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the process of job work), the supply would merit classification as service and 18% GST as applicable will be charged accordingly. The relevant portion of the Circular was given 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, it is mentioned that the services of bus body fabrication on job work basis attracts 18% GST on such service. Thus, fabrication of buses may involve the following two situations:- a) Bus body builder builds a bus, 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 chassi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal supply is goods and not job work. HSN 8707 says that HSN Code 8707: Bodies (Including Cabs), For the Motor Vehicles of Headings 8701 To 8705 3.5 In his AAR application, the applicant has raised a query that 'Whether his fabrication process is a Supply of Good or Service and rate of tax to be charged accordingly. 3.6 Before providing comments on the above application, definitions as per act(s), circulars issued by CBIC, as referred by applicant needs to be discussed. Details as follows 3.6.1 Manufacture has been defined under Section 2(72) of the CGST/PGST Act 2017, as under:- 2(72) Manufacture means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term manufacturer shall be construed accordingly. 3.6.2 Whereas, Section 2(68) of the CGST/PGST Act, 2017 defines the job work as: - 2(68) 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 constructed accordingly . 3.6.3 As per Sec. 2(30), composite supply means,- supply made by a taxable pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain inputs required for fabrication work and the same will not amount to manufacture . 3.6.8 In the para 12 of the circular No 52/26/2018/GST dated 9th August 2018 issued by the Government of India Ministry of Finance has clarified the matter 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, it is mentioned that the services of bus body fabrication on job work basis attracts 18% GST on such service. Thus, fabrication of buses may involve the following two situations:- a) Bus body builder builds a bus, working on the chassis owned by him and supplies the built-up bus to the customer, and charges the customer for the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld like to state that the provisions of both the CGST Act and the PGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the PGST Act. 5.2 Briefly the applicant is engaged in tipper body building and fabrication and mounting the same on the Chassis supplied by the customers. Firstly, the customer purchases chassis and then handovers the same to the applicant in its factory shed for fabricating the tipper body and mounting the same on the said chassis. On receipt of chassis, a work order with the specifications of the tipper body is raised and on acceptance of the customer, all kind of input materials used for structural fabrication e.g. Tipping Kit, Iron Steel Angle, Channel, Plate, Sheets Aluminium Sheets, Ply Wood, Wood, Glass Nut Bolts, Paints and Mise. Other spares stores and hardware goods etc. are purchased by the applicant at their own cost and using the same the applicant builds and fabricates the Tipper Body and mounts the same on the Chassis supplied by the customer. At no stage of time, the ownership of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d are self-explanatory in nature. The advance ruling sought by the party gets squarely covered under Para 12.2 and 12.3 of the said circular. 5.5 In other words, if the activity of fabrication and mounting of body is done on the chassis owned by applicant and using his own inputs capital goods, the same shall amount to supply of goods and shall merit classification under HSN 8707, attracting 28% of GST. 5.6 On the contrary if the activity of fabrication and mounting of body is done on the chassis supplied by the customer using their own inputs capital goods amounts to supply of service, in terms of CBIC Circular dated 09.08.2018 and merits classification under SAC 9988, attracting 18% of GST. 6. In view of the observations stated above, the following rulings are issued: RULING a) The activity of building and fabricating of Tipper Body and mounting the same by the applicant and collecting fabrication charges including inputs required for such fabrication work, if the chassis is owned and supplied by the customer, will result in supply of services under SAC 9988 and shall be attracting a GST @18% b) The activity of building and fabricating of Tipper Body and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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