Page 169 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : V.E. COMMERCIAL VEHICLES LIMITED 383
6.2.8 Once it is established that it is a job work then it is supply of ser-
vice. In this case the principal supply is supply of service. Thus, it should be clas-
sified as services and tax is @ 18% under CGST Act.
6.2.9 Here it is also important to note that principal is charging @ 28%
GST under HSN Code 8707 on supply of a complete vehicle but body building
for him is a receipt of service and duly covered under HSN Code 9988 where the
rate of tax is applicable @ 18% under GST Law.
6.2.10 Reliance is placed on the following judgments :-
(a) The Hon’ble Goa Authority for Advance Ruling in the case of Auto-
mobile Corporation of Goa Ltd., Sattari (2018) 33 GSTJ 581 = 2018 (18)
G.S.T.L. 359 (A.A.R. - GST) has held that the activity of building and
mounting of the body on the chassis provided by the principal un-
der FOC chalan will result in supply of services under HSN 9988
and hence, should be taxed @ 18% GST.
(b) There is a judgment of Authority for Advance Ruling - Madhya
Pradesh in the case of Arpijay Fabricators Pvt. Ltd. - 2018 33 GSTJ 211
= 2018 (16) G.S.T.L. 157 (A.A.R. - GST) where it was held that if the
predominant element to be the service part, then the principal sup-
ply would be classified under Heading No. 9988.
(c) As per the process of body building, some goods are used by job
worker Therefore it is composite supply consisting of small part of
supply of goods and major part of supply of services. As per the
provision of Section 8(a) of CGST Act the same should be classified
as supply of services under HSN-9988 which attracts Tax @ 18%
GST.
7. Discussions and findings :
7.1 We have carefully considered the submissions made by the appli-
cant in the application and during time of personal hearing.
7.2 Now we come to the question raised by the Applicant as Whether
mounting of Bus/Truck Body by the job worker on the chassis supplied by the
principle for which the applicant charged fabrication charges including cost of
certain material that was consumed during the process of job work would be
classified as supply of service under HSN-9988”.
7.3 We Find that the activity and question raised before us has been
suitably clarified and dealt with Circular No. 52/26/2018-GST issued by Gov-
ernment of India, Ministry of Finance, Department of Revenue, dated 9-8-2018.
7.4 The following Para’s of the above mentioned circular the issue has
been dealt with which are as follow -
(1) Applicable GST rate for bus body building activity : Representations
have been received seeking clarifications on GST rates on the activi-
ty of bus body building. The doubts have arisen on account of the
fact that while GST applicable on job work services is 18%, the sup-
ply of motor vehicles attracts GST @ 28%.
(2) Fabrication of body may involve the following two situations :
(a) A vehicle body builder builds a vehicle, working on the chas-
sis owned by him and supplies the built-up vehicle to the
customer, and charges the customer for the value of the bus.
In this scenario the chassis is being manufactured by the one
of the unit of applicant registered separately as distinct per-
GST LAW TIMES  20th August 2020  169