Supply of Fabrication & Mounting of Tanker & Tripper on Chassis attracts 18% GST: AAR [Read Order]

The Gujarat Bench of the Authority for Advance Rulings (AAR) has ruled that the activity of fabrication & mounting of Tanker and Tripper on chassis supplied and owned by the principal is a supply of Service and attracts 18% of GST.

M/s. Hasmukhlal Jivanlal Patel, the applicant is engaged in building bodies of various vehicles falling under Chapter 87 of the First Schedule to the Customs Tariff Act such as mounting of tankers, tippers etc. on chassis provided by the owner of such chassis, either registered or unregistered.

The applicant submitted that the activity undertaken by them was in the nature of working on the goods. The applicant claimed that as per the Scheme of Classification of services in the Annexure to Notification No. 11/2017 Central Tax (Rate) and corresponding SGST/ IGST Notifications, their services would be covered under the main head of 9988 which reads as under: “Manufacturing services on physical inputs (goods) owned by others”

The authority comprising of Atul Mehta and Amit Kumar Mishra viewed that the applicant procures various goods such as raw steel etc. as inputs for fabricating the bus body on the chasis supplied by the principal on delivery challan.

The applicant uses the said material for mounting/fabricating the body and once the body is built and mounted on the chassis, the vehicle is sent back to principal where the applicant charged the lump sum charges of fabrication including cost of certain material that was consumed during the process of mounting of Bus Body on the chassis.

The authority held that the activity of fabrication and mounting of Tanker and Tripper on the chasis supplied and owned by the principal is supply of Service. The rate of tax in both the cases if chasis is supplied by the registered person (principal) and un-registered person (principal) would be 18% as per Entry No. 26 (ic) and 18% as per Entry No. 26(iv) respectively. This activity merits classification SAC 998882 ‘Other transport equipment manufacturing services’ as per Annexure attached to Notification No. 11/2017 Central Tax (Rate)

To Read the full text of the Order CLICK HERE

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