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2018 (8) TMI 284 - AAR - GSTClassification of Supply - activity of Body Building on the chasis supplied by the Principal, which is undertaken as a job work - utilising and consuming tangible material from their (Applicant’s) end for fulfilling the job work. Whether the supply is to classified as supply of goods or supply of services? - Held that:- In the case of bus body building there is supply of goods and services. Thus, classification of this composite supply, as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case - the activity of Body Building undertaken by the Applicant, carried out on the chassis supplied by the principal in the capacity of a job worker, would amount to ‘Composite Supply’ as define under CGST Act 2017/MPGST Act 2017. What would be the appropriate classification and applicable rate of tax for the above transaction? - Held that:- The classification in case of a composite supply has to be arrived at on the basis of ‘predominant element’ of a composite supply, which in turn would be the ‘Principal Supply. Needless to say that as per the definitions envisaged under the statute the predominant component of the composite supply involved in the activity of Body Building would determine the rate of tax applicable on such composite supply. In case the ‘Goods’ part is predominant, then the Composite Supply in this case would be governed by Chapter 87 depending upon the nature of body being built by the Applicant on the chasis supplied by the principal. In case, the ‘Service’ part is predominant in the composite supply, then the rate of tax would be applicable as per Heading No.9988 - Due to incomplete information provided by the Applicant, the Authority finds itself constrained to provide any definitive ruling on this aspect. Ruling:- The activity of Body Building undertaken by the Applicant, carried out on the chasis supplied by the principal in the capacity of a job worker, would amount to ‘Composite Supply’ as define under CGST Act 2017/MPGST Act 2017. The rate of tax on such Composite Supply would be determined by the predominant component involved in such Composite Supply in terms of Section 8(a) of the CGST Act 2017, depending upon the character of the body being built on the chasis, which would eventually be classifiable under Chapter 87 of the Tariff. On the other hand, if the predominant element happens to be the Service part, then the Principal supply would be classified under Heading no.9988.
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