Home Case Index All Cases GST GST + AAR GST - 2019 (9) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (9) TMI 1483 - AUTHORITY FOR ADVANCE RULING, HARYANAClassification of supply of goods as well as services - composite supply or not - Supply of bus or separate supplies - Supply of chassis, taxable at the rate 28% as per the prescribed HSN - Provision of services in respect of activity of mounting/fabricating of bus body on the chassis wherein the said activity of mounting/fabricating is outsourced by the Applicant to the body builder - recovery of the bus body building charges incurred by the Applicant on behalf of customer in capacity of an agent - to be covered in the ambit of Schedule I of Central Goods and Services Tax Act, 2017 - to be leviable at the rate of 18% as supply of services or not - CBIC vide Circular No. 34/8/2018-GST, dated 1-3-2018. HELD THAT:- From the definition of Composite Supply, it is clear that in the present case there is a composite supply of goods i.e. chassis and supply of services i.e. fabrication/mounting of bus body on the chassis supplied by the applicant. Now, classification of this composite supply, as goods or service would depend on which supply is the principal supply which is to be determined on the basis of facts and circumstances of the present case - From the above definition of principal supply it is clear that in the present case there is a principal supply of goods or services which constitutes the predominant element of a composite supply. The predominant element of the composite supply is to be determined on the basis of facts and circumstances of the present case. It is clear that the bus body builder is doing fabrication of body on chassis provided by the principal (the applicant is principal in this case; type 1), this amounts to job work, the supply would merit classification as service, and 18% GST as applicable will be charged accordingly - the applicant has a complete bus ready to supply to the customer. The supply of chassis mounted with bus body to the customer, shall be treated as a supply of bus; classifiable under chapter heading 8702; taxable at the rate 28%. The Applicant will enter into a contract with its customer for the sale of chassis. Pursuant to which, request is received from the customer for fabrication of the bus body on the chassis purchased by him. In this regard, a subsequent contract will be entered between the Applicant and the customer for the provision of services in respect of activity of mounting/fabricating of bus body on the chassis. In respect of the above, the Applicant will further enter into an arrangement with body builder for mounting the bus body (as per customer specifications). For executing supplies as per the above arrangement, the Applicant sends the chassis to the bus body builder under the cover of a challan - it emerges that the applicant whether a dealer or an agent is providing only chassis. All inputs/materials required for fabrication of bus body, has to be used by the bus body builder from its own account. Under such situation it is the bus-body which is being fabricated and also being mounted on the chassis provided by the applicant. Therefore, it is not merely job-work. Rather it is supply of bus body and the activity of fitting/fabrication/mounting of bus body on chassis is an ancillary activity to the principal activity of supply of bus-body. Hence, in terms of the clarification issued by the CBIC vide Circular No. 34/8/2018-GST, dated 1-3-2018; the impugned activity is a composite supply, with principal supply being supply of bus-body - It is clear from the above invoice that the bus body builder is supplying bus body to the applicant as principal supply. Where the Applicant enters into a contract for sale of chassis of bus to the customer and subsequently, enters into a separate arrangement with the said customer, wherein the Applicant is appointed as an agent by the customer for undertaking the activity of mounting of bus body on the chassis on behalf of the customer. The recovery of the bus body building charges incurred by the applicant on behalf of customer in capacity of an agent, should be covered in the ambit of Schedule I of Central Goods and Services Tax Act, 2017 and thus, leviable to GST taxable at the rate 28% - it is evident that the activity of fabrication, fitting and mounting of bus bodies on the chassis supplied by the applicant is a composite supply with supply of goods i.e., bus-bodies, being principal supply (HSN Code 8707).
|