The Punjab Authority for Advance Ruling (AAR) has held that 18% Goods and Service Tax (GST) shall be payable on tipper body building and mounting if the chassis was owned and supplied by the customer.
The applicant Raj Agro Aids was engaged in Tipper Body Building and Fabrication and mounting the same on the Chassis supplied by the customers. The customers purchase chassis and handover to the applicant’s factory shed for fabricating the Tipper Body and mounting the same on the said chassis.
All kinds of input materials used for structural fabrication were purchased by the applicant at its own cost and using the same the applicant builds and fabricates the Tipper Body and mounts the same on the Chassis supplied by the customer. At no stage of time the ownership of the chassis is transferred by the customer to the applicant rather the ownership of chassis always remains with the customer.
The applicant has stated that they were treating the activity of building and fabrication of Tipper Body and mounting the same on chassis owned and supplied by the customers with installation services as Supply of Goods and was classifying the same under Tariff Item No. 8707 and charging GST @ 28%.
The Authority of Viraj Shyamkarn Tidke and Vrinder Kaur has held that,
The activity of building and fabricating of Tipper Body and mounting the same by the applicant and collecting fabrication charges including inputs required for such fabrication work, if the chassis was owned and supplied by the customer, would result in supply of services under SAC 9988 and would be attracting a GST @18%.
The Authority further held that, the activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned by the applicant and using its own inputs & capital goods would amount to supply of goods and would be classified under HSN 8707, attracting GST @28%.
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