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2018 (7) TMI 1422 - AAR - GSTNature of supply - Classification - Business of fabrication & fitting out bus bodies on the chassis supplied by its customers - Job work or contract for sale of goods? - rate of tax. Whether the activity of fabrication & fitting and mounting of bus bodies on the chassis supplied by the other party is a job work (SAC 9988 or contract of sale of bus body HSN CODE 8707? - If it is held to be a job work, what rate of tax is required to be charged and paid? Held that:- It is only the chassis which is supplied by the customers of the applicant and in fact no treatment or process is undertaken by the applicant on the chassis itself, except fitment/mounting of bus body on the same. At the same time, bus body building involves use of raw materials/inputs etc., for manufacture/fabrication of bus body and the cost of these inputs, etc., do form the part of value which is being charged by the applicant from its customers - It emerges that the customer is providing only chassis. All inputs/materials required for fabrication of bus body, has to be used by the applicant 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 customer. Therefore, it is not merely job-work. It is supply of bus body and an activity of fitting/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 CBEC vide circular No.34/8/2018-GST dt.03.03.2018, the impugned activity is a composite supply, with principal supply being supply of bus-body - As the activity has not been held as supply of service, the second rate of tax on supply of service is not required to be spelt out in this ruling. Ruling:- The activity of fabrication and fitting and mounting of bus bodies on the chassis supplied by the other party is a composite supply with supply of goods, i.e., bus-bodies, being principal supply (HSN code 8707).
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