The Uttar Pradesh Authority of Advance Ruling (AAR) ruled that activity of bus body building is supply of goods and services depending on the principal supply.
The applicant, Adithya Automotive Applications Pvt. Ltd. is engaged in the body building and mounting of body on the chassis of different models of Tippers, Tankers, Trucks and Trailers. The applicant receives chasis of these items from TATA Motors and other customers on the basis of returnable challan. The applicant has described the manufacturing process as under Fabrication of steel sheets, hollow steel pipes, Round Steel pipes, angles and Channels of steel according to desired / required size. Assembly/ joining of the above-mentioned fabricated pieces of iron and steel by way of welding with help of welding electrodes (copper coated wire) to give a shape of Tipper body. Mounting/fixing of the assembled structure of the Tipper body on the chassis by welding with the help of welding electrodes and also in certain places with nuts and bolts.
The applicant has sought the advance ruling on the issue whether the Body Building Activity on the Chasis provided by the principal would Amount to manufacturing Services Attracting 18% of GST and Whether Clarification of CBIC vide para No. 12.3 of circular no 52/26/2018-GST dated 09.08.2018 Clarifying 18% rate of GST in respect of building of Body of buses would also Apply in the Case of Applicant.
The Coram of Vivek Arya and Abhishek Chauhan ruled that in the case of bus body building there is supply of goods and services. Thus, classification of this composite supply, as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case.
“We find that all inputs required for fabrication of vehicle-body (Tippers, Trailers, Truck, Tankers) on chassis are procured by the applicant and fabricated vehicle-body mounted on the chassis is supplied by the applicant. Therefore, in the instant case, it is a supply of body of the vehicle and the activity of fitting/mounting of vehicle-body on the chassis is an ancillary activity to the principal activity of supply of vehicle-body. Hence, in terms of the clarification issued by the CBEC vide Circular No. 34/8/2018-GST, dated 1-3-2018, the impugned activity is a composite supply, with principal supply being supply of body of the vehicle,” the AAR ruled.
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