Tanker Bodybuilding on Job Work basis, on Chassis supplied by Customer, is Supply of Services, 18% GST payable: AAR [Read Order]

The Kerala Authority of Advance Ruling (AAR) ruled that Tanker bodybuilding on job work basis, on chassis supplied by the customer is Supply of Services and 18% GST is payable.

The applicant, CC FABS is engaged in tanker body fabrication on the chassis given by the customer on a job work basis. The customers purchase the chassis and hand it over to the applicant for fabricating the tanker body. On receipt of chassis, a work order with the specifications of the tanker body will be raised and on acceptance of the same by the customer, the materials used for structural fabrication of the tanker will be procured and the tanker body will be built on the chassis. The processes involved in the manufacturing activity are receiving chassis at the workshop; purchase of raw steel; cutting and bending of raw materials; welding of all cut and bend parts; assembly of all fabricated parts and statutory parts; and final product on chassis and delivery of the tanker with license.

The applicant has sought the advance ruling on the issue of whether the activity of tanker bodybuilding on a job work basis, on the chassis supplied by the customer, is the supply of goods or a supply of service. If it is a supply of services, what is the applicable rate of GST, and what will be the service code (tariff) for the above-stated activity of tanker bodybuilding carried out on chassis of motor vehicles owned by customers?

The Coram of Joint Commissioner of Central Tax, Shiva Prasad, and Additional Commissioner of State Tax, Senil A.K.Rajan observed that the activity of tanker bodybuilding on the chassis supplied by the customer is a supply of service.

“The activity is liable to GST at the rate of 18% as per entry at SI No. 26 (iv) 9988 “Manufacturing services on physical inputs (goods) owned by others Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above” of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017,” the AAR said.

The AAR further ruled that the activity of tanker bodybuilding on the chassis owned by the customer is classifiable under Service Accounting Code 998881.

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