9911796707
TMI Blog2024 (10) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted as to whether the individual private customer who buys the chassis from OEM and provide the same to the applicant for body building is registered under GST or not, the provisions of law enumerated in the preceding paras make a clear demarcation between the supply of body building activity made to GST registered persons and the supply of body building activity made to GST I-in-registered persons. Whereas the bus body building on chassis owned by GST registered customer is Job work, the bus body building on chassis owned by un-registered customer does not amount to job work. As per the definition of Job Work provided under Section 2 (68) of CGST Act 2017, job work means any treatment or process undertaken by a person on goods belonging to another registered persons and the expression job worker shall be construed accordingly. Hence, in as much as the treatment or process is undertaken on the goods belonging to un-registered person the same does not qualify to be job work - the activity Of body building by the applicant on chassis owned and provided by registered customer or un-registered customer both fall under the scope of supply of service and as per the scheme of classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference to the Central Goods and Service Tax Act would also mean a reference to the Same provisions under the Tamil Nadu Goods and Service Tax Act. M/s Kailash Vahan Private Limited S.No. 391A/1, 3-6, 393, Walajabad Sunguvarchatram Road, Kattavakkam, Kancheepuram, Tamil Nadu-631604, thereinafter called as the Applicant ) is engaged in body building activity on JOB WORK Basis, on Chassis owned and supplied by the Customer / Principal (Who may be independent customer who buy chassis from OEM and send for body building or it can be by OEM i.e. Manufacturer of chassis who sends for body building activity), to make it as fully Body built vehicle for Truck / Tipper / Dumper application (Which are for carrying goods) and which body built vehicle will also be owned by the principal, who sends the chassis on FOC basis for job work. They are registered under the GST Acts with GSTIN: 33AAACK7302G1Z0. 2. The Applicant submitted a copy of challan dated 22-05-2023 evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 3. They have preferred this application seeking Advance Ruling on the following: 1) Whether Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant submits that the chassis manufacturer i.e OEM s also intend to place order on the applicant and have such body building activity of the chassis owned by them so that complete body built vehicle owned by them is supplied to them after the applicant carries out job work activity of body building on the chassis owned by them, but OEM s are insisting on seeking advance ruling before they send their chassis for such body building activity. That presently, applicant is only supplying body to such OEM s as supply of body under CH-8707 paying 28% GST, but once the present advance ruling application is decided, the applicant would like to build the body on the chassis supplied by OEM s as well, regarding the body building activity as job work and supply of services u/s 7 of CGST/TNGST act, 2017 attracting 18% levy of GST. 4.4. With regard to the above, in respect of body building activity already being carried by the applicant on the chassis owned and sent by independent private customer, the applicant submitted that they would like to place on record the following- (a) Tax invoice issued by OEM for supply of Chassis to such independent private customer who buys chassis from OEM. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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. 4.6. The applicant submitted that vide Notification No. 26/2019-Central Tax (Rate) dated 22nd November, 2019 and explanation provided states as - Explanation - For the purposes of this entry, the term bus body building shall include building of body on chassis of any vehicle falling under chapter 87 in the First Schedule to the Customs Tariff Act, 1975. 4.7. The applicant submitted that the relevant amended text of Sri. No. 26 of Notification No. 11/2017-CT (rate) dated 28.6.2017 is given as under: Sr.No. Chapter Section or Heading Description of Service Rate (per cent.) Condition 26. Heading 9988 (Manufacturing services physical inputs (goods) owned by others) (i) Services by way of job work in relation to- .. (ia) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the core issue as to whether the classification of body building activity on the chassis (meant for carrying goods) owned and provided by the principal (who is ether independent customer who buy the chassis from OEM and send for body building or Chassis sent by OEM i.e. manufacturer of chassis who sends for body building activity) could be regarded as job work as Supply of Service and in terms of Para No. 12.1, 12.2(b) and 12.3 of Circular No. 52/26/2018-GST dated 09.08.2018, as Applicant activity also is akin to the one referred to in the said Circular and by various Advance Ruling on the said issue of body building activity carried on the Chassis supplied by the principal. 4.10 The applicant stated that it is also provided at Sri No. 26 (ic) of parent Notification No. 11/2017-CT (Rate) dated 28.6.2017 which prescribe rate of tax for job work of 18% (9 + 9) as amended, read with amended Notification 26/2019-Central Tax (Rate) dated 22.11.2019, read with CBIC clarification that Services by way or job work in relation to bus body building is Supply Of Services and for that matter even under Srl No. 26 (iv) that applicable rate for job work is 18% (9+9). 4.11. Reiterating the explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Act, 2017. Further the Central Authority stated that as per para 12 of CBIC Circular No. 52/26/2018-GST dated 9th August 2018, the CBIC had clarified the applicability of GST on job work services, in respect of Body building activity carried out on chassis for Bus and requested that the advance ruling application be disposed of as per the guidelines given in the above said circular. 5.3 The State jurisdiction Officer viz. the Assistant Commissioner (ST), Kancheepuram Rural Assessment Circle, vide reference No. in Rc. 150/2024/A2, dated: 19.09.2024, states that - Tvl. Kailash Vahn Private Limited S.No.391A/1, 3-6,393, Walajabad - Sunguvarchatiram Road, Kattavakkam village, Kancheepuram, Tamil Nadu - 631 604 is a registered taxpayer in the jurisdiction of the Assistant Commissioner (ST), Kancheepuram (Rural) Assessment Circle. The taxpayer doing Manufacturing activity and supply Of Goods and Services under the following HSN CODE: Goods Services HSN Description HSN Description 87079000 BODIES (INCLUDING CABS). FOR THE MOTOR VEHICLES OF HEADINGS 8701 TO 8705 OTHER 00440262 TRANSPORT OF GOODS BY ROAD 87089900 PARTS AND ACCESSORIES OF THE MOTOR VEHICLES OF HEADINGS 8701 TO 8705 - OTH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the principal that means, the chassis is provided by the Principal, and the body is built on by the tax payer. After the body building activity, due end product is arose, which is a fully built vehicle, is a tangible good. The body building process transforms the chassis into a complete vehicle, which can be seen as a manufacturing activity resulting in a new product. Hence it should be classified under this heading ( HSN 8707 ) attracting 28% GST. And also During the body building process, the body builder has control over the materials and the manufacturing process. Hence it leads to creation of a new good rather than supply of service. Hence as per the job work definition, the taxpayer has not come under any treatment or process of undertaken and also the taxpayer has made the body building, it may consider a supply of goods, it would fall under Heading 8707 of the Harmonized System (HS) Code, specifically Bodies (including cabs), for the motor vehicles of headings 8701 to 8705. attracting 28% GST. 6. PERSONAL HEARING The Applicant, was given an opportunity to be heard in person 19.08.2024. Shri Srinivasan Narayanan, Advocate, appeared for the personal hearing as the Authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assis manufacturer (also referred to as OEM s), which is sent to the applicant for the purpose of body building activity of Tipper version Motor vehicle falling under Chapter 87 as complete motor vehicle, which belongs to such customer and the customer owns the chassis and also owns complete body built vehicle and which is also registered in RTO in the name of such independent private customer. The applicant further submits that the chassis manufacturer i.e OEM s also intend to place order on the applicant and have such body building activity on the chassis owned by them so that complete body built vehicle owned by them is supplied to them after the applicant curies out job work activity of body building on the chassis owned by them, but OEM s are insisting on seeking advance ruling before they send their chassis for such body building activity. 7.4 Hence the applicant is seeking advance ruling on the core issue as to whether the classification of body building activity on the chassis (meant for carrying goods) owned and provided by the principal (who is either independent customer who buy the chassis from OEM and send for body building or Chassis sent by OEM i.e. manufacturer of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding, 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. 7.8. Further vide Notification No. 26/2019-Central Tax (Rate) dated 22nd November, 2019 an explanation was inserted in the Table, against serial number 26, in column (3), in item (ic) of Notification No. 11/2017-Central Tax (Rate), dated 28.06.2017. The said explanation is reproduced below; Explanation - For the purposes of this entry, the term bus body building shall include building of body on. chassis of any vehicle falling under chapter 87 in the First Schedule to the Customs Tariff Act, 1975 7.9. From the above provisions of law we find that any treatment or process which is applied to another person s goods is a supply Of service. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 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. 7.13. However we find that the activity Of body building by the applicant on chassis owned and provided by registered customer or un-registered customer both fall under the scope of supply of service and as per the scheme of classification of services merits to be classified at Heading 9988 Manufacturing services on physical inputs (goods) owned by others and precisely at Service code (Tariff) 998881 Motor vehicle and trailer manufacturing services . 7.14. Now we take up the second question of the applicant i.e If it is regarded as job work activity and Supply of Services, whether the correct applicable rate of GST, will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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