The Applicant, M/s. AB N Dhruv Autocraft (India) Pvt. is providing service of body building on motor vehicles by fabrication and charged fabrication charges on lump sum basis. They are providing manufacturing service or body building services on physical inputs (goods) or chassis owned by others and provided by the owner for body building and applicant charges lump-sum fabrication charges including certain material that would be consumed during the process of bodybuilding.
The applicant is carrying out this activity for manufacturing of tipper, tanker, trailer etc. on chassis provided by the owners of such vehicles.
The applicant sought advance ruling on the issue whether the treatment or process of body building by fabrication and other processes carried out on chassis of motor vehicle owned by others is supply of services.
The two-member bench of Sanjay Saxena and Mohit Agarwal ruled that in case the applicant received the chassis from the principal on Job work challan/ delivery challan and build a body on it and thereafter clear to the principal by raising the Invoice of Job work charges, it would amount to supply of service.
The AAR further said that in cases where the applicant owned the chassis and built the body and thereafter supplied a complete body built motor vehicle to the customer by raising the invoice of the value of the motor vehicle, it would amount to supply of goods.
The other issue raised was if the stated activity of bodybuilding is considered as a supply of service in terms of the description given in paragraph 3 of Schedule II of the CGST Act, 2017 what will be the rate of GST applicable to such service.
The AAR ruled that in case of a supply of service, the rate of GST will be 18% (9% CGST and 9% SGST). In the case of the supply of goods i.e. motor vehicle GST rate will be 28% (14% CGST and 14% SGST).
“The activity of body building carried out on another person’s chassis of motor vehicle is classifiable under SAC 9988. In case of supply of complete built-up motor vehicle on its own chassis is classifiable under CTH 87 (depends upon type of vehicle supplied),” the AAR said.
The Authority further observed that The classification and applicable rate of tax for the activity of accident repairing job on the vehicle supplied by the owner for such job if a lump sum price is charged that includes cost of material and labour is classifiable under SAC 9987 and GST is leviable at the rate of 18 % ( 9% CGST + 9% SGST).Subscribe Taxscan AdFree to view the Judgment