The Tamilnadu Authority for Advance Ruling (AAR) has recently held that bus body building activity attracts 18 percent Goods and Service Tax.
The applicant Royal coach builders is a proprietrix concern engaged in bus body building activity who are constructing the body over the chassis supplied by the customers according to their requirements.
The applicant has sought an advance ruling on the issue of whether the activity of bus body building on the chassis supplied by the customer on a job work basis is a supply of service or supply of goods? If it is a supply of service, what is the GST rate?
Before the bench M Sarvanan, authorized representative of the applicant submitted that they undertake fabrication of bus body over the chassis owned and supplied by the customers hence the activity qualifies as job work and therefore it is a supply of services under Goods and Service Act.
The state commissioner of state jurisdictional authority, found that the activity of bus body building on the chassis supplied by the customer on job work basis is supply of service falling under SAC code 9988 and the GST and the GST rate is 18%
After considering the submissions made by the applicant and central and state jurisdictional authorities the member of authority N Usha and R Gopalaswamy ruled that “activity of bus body building undertaking on the chassis supplied by the customer to the applicant amount to supply of service as per schedule II cause 3 Of CGST Act 2017 and will be attract 18% GST.
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