The applicant, Tube Investments of India Ltd. is engaged in the business of manufacture and sale of cycles, metal forming products, tube products, and chains and also undertake the activity of body building for various customers across India.
The customers of the applicant predominantly comprise fleet owners who require trucks for use in their business of transportation of goods. The two stages involved in the manufacture of trucks are Manufacture of Chassis; and Erection of body over chassis.
The applicant sought the advance ruling on the issue of whether the activity of building and mounting of the body on the chassis made available by the customers will result in supply of goods or supply of services.
The applicant is entrusted with the work of building the load body using his own material for fabricating the bus body besides fabrication services.
Once the bus body is built and mounted on the chassis, the vehicle is sent back to the Customers after raising tax invoice towards body building charges on which GST is charged separately. At no stage the ownership of the chassis is transferred to the applicant. The consideration received by the applicant is towards the manufacturing of the bus body on the chassis supplied by the principal.
The activity undertaken by the applicant for bodybuilding on the chassis provided by the customer is to be classified as Job work under CGST/TNGST Act 2017 and as per Schedule II of CGST Act 2017, the said activity of building a body on the chassis of the customer by the applicant is supply of services.
The two-member bench of Manasa Gangotri Kata and Kulinjee Selvaan ruled that the activity of body building undertaken on a truck chassis made available by the consumer to the applicant amounts to supply of services under Schedule II clause 3 of CGST Act 2017.Subscribe Taxscan AdFree to view the Judgment