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2021 (12) TMI 162 - AAR - GSTClassification of services - rate of GST - body building activity on the chasis provided by the principal - Taxable @ 18% of GST or not - applicability of clarification of CBIC vide para no. 12.3 of Circular No. 52/26/2018-GST dated 09.08.2018 clarifying 18% rate of GST in respect of building of body of buses - HELD THAT:- The said circular clarify that GST applicable on the activity of bus body building on job work basis is 18%. As such, the body building on job work basis is pre-requisite for applicability of GST rate of 18%. As per "Section 2 (68) of the CGST Act, 2017, “Job work" means any treatment or process undertaken by a person on goods belonging to another registered person and the expression "job worker" shall be construed accordingly". The applicant builds the body on chassis by purchasing all materials required for body building of the vehicle. The applicant is receiving only chassis and all inputs/materials required for fabrication of the body has to be used by the applicant from its own account. It is observed from the sample tax invoice of the principal issued to the applicant that there is mention of value of chassis, GST amount and total amount. It indicates that the ownership of chassis has been transferred to the applicant by the principal. Moreover, Tax Invoice issued by the applicant to the principal has mention of description of goods along with Body Serial No. as well as charging GST Rate of 28%. As such, it is clear that there is supply of the body of the vehicle in the said transaction. The fact gets pretty clear when circular in situation 12,2(b) refers that body builder recover fabrication charges including certain material that was consumed during the process of job work. However, in the instant case, the dominant character of work relates to supply of goods rather than supply of service. As such, this case is not covered under circular No. 52/26/2018-GST dated 09-08-2018. All inputs required for fabrication of vehicle-body (Tippers, Trailers, Truck, Tankers) on chassis are procured by the applicant and fabricated vehicle-body mounted on the chassis is supplied by the applicant - Therefore, in the instant case, it is a supply of body of the vehicle and the activity of fitting/mounting of vehicle-body on chassis is an ancillary activity to the principal activity of supply of vehicle-body. Hence, in terms of the clarification issued by the CBEC vide circular No. 34/8/2018-GST, dated 1-3-2018, the impugned activity is a composite supply, with principal supply being supply of body of the vehicle.
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