Page 170 - GSTL_20th August 2020_Vol 39_Part 3

384 GST LAW TIMES [ Vol. 39
son under GST Act and sold to provider of chassis before re-
ceiving the chassis for fabrication of body. In this situation, as
per facts and information produced, the ownership of chassis
is transferred by one unit of applicant to the customer and
then customer provides such chassis to the applicant for
mounting/fabrication of bodies on it. As the customer is tak-
ing supplies from both unit of same company separately,
which do not have bearing on each other’s supply. Hence no
transaction is taking place between the two distinct persons.
Taxability of the supply between customer and the applicant
is completely different from the supply taking place between
customer and the other unit of applicant.
(b) The chassis is originally manufactured by some other OEM
and sold to provider of chassis before receiving the chassis
for fabrication of body. The Applicant builds body on chassis
provided by the principal, the owner of chassis for body
building, and charges fabrication charges (including certain
material that was consumed during the process of job-work).
Nowhere the ownership of chassis is transferred to the Ap-
plicant i.e. the body builder.
(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 vehicle, and ac-
cordingly supply would attract the GST applicable to the vehicle @
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.
7.5 The submission by the applicant with the application and during
time of argument clearly shows that the nature of the work for which ruling on
the rate of Tax has been sought in the question clearly falls under Para 12.2(b) of
the above mentioned circular 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.
8. RULING
8.1 In respect of the question raised by the applicant we hold that the
supply towards provision of services in respect of activity of mount-
ing/fabrication of bodies on chassis provided by Customer should be treated as
supply of bus or provision of services in respect of activity of mount-
ing/fabrication of bus body on the chassis wherein the said activity of mount-
ing/fabrication is outsourced to the Applicant by owner/provider of chassis, in
no case the ownership of the chassis belongs to the applicant, hence in both the
scenarios mentioned in the question will be taxable under SAC 9988 81 - “Motor
vehicle and trailer manufacturing services” and [under Entry No. 26(iv)] as
1
“Manufacturing services on physical inputs (goods) owned by other” it is taxable
@ 18% (9% under CGST and 9% under SGST Act).
8.2 This ruling is valid subject to the provisions under Section 103(2)
until and unless declared void under Section 104(1) of the GST Act.
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1 Corrected by Rectification Order dated 9-6-2020.
GST LAW TIMES  20th August 2020  170