The Authority of Advance Ruling (AAR) Madhya Pradesh ruled that 18% of GST applicable to the fabrication of the body on chassis provided by the customer.
The applicant, M/s VE Commercial Vehicle Limited is engaged in the various businesses including manufacturing of Chassis, Trucks & Buses, Engines, Bus body, and automotive components. The applicant has different manufacturing units/manufacturing verticals h the State of Madhya Pradesh registered separately under the GST Act.
The applicant has sought the advance ruling on the issue whether the supply towards the provision of services in respect of activity of mounting fabrication of bodies on chassis provided by Customer should be treated as supply of bus or provision of services in respect of activity of mounting/fabrication of bus body on the chassis wherein the said activity of mounting/fabrication is outsourced to the Applicant by owner/provider of chassis in two scenarios.
Firstly, the chassis is originally manufactured by one of the units of the applicant registered separately as a distinct person under the GST Act and sold to the provider of chassis receiving the chassis for the fabrication of the body.
Secondly, the chassis is originally manufactured by some other OEM and sold to the provider of chassis before receiving the chassis for the fabrication of the body.
The Authority consisting of its members Manoj Kumar Chobey and Virendra Kumar Jain ruled that the supply towards the provision of services in respect of activity of mounting/ fabrication of bodies on chassis provided by Customer should be treated as supply of bus or provision of services in respect of activity of mounting/fabrication of bus body on the chassis wherein the said activity of mounting/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 998881 ‘Motor vehicle and trailer manufacturing services’ and under entry no. 26(iv) as ‘Manufacturing services’ on physical inputs (goods) owned by others it is taxable at the rate of 18%.
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