TMI Blog2019 (7) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ich GST will be charged separately. At no stage the ownership of the chassis will be transferred by the Principal to the job worker and body built thereon will be nature of job work - The job worker will claim the credit of GST paid on the material used as input against Output liability of GST on body building activity carried out by it. The consideration received by the job worker will be towards the manufacturing of the body on the chassis supplied by the Applicant (Principal). Whether the nature of the work falls under the purview of Job work or not? - HELD THAT:- Once the body is built and mounted on the chassis by the job worker, the vehicle will be sent back to the Applicant/Principal after raising tax invoice towards body building charges on which GST will be charged separately. At no stage the ownership of the chasis will be transferred by the Applicant to the job worker. The job worker will claim the credit of GST paid on the material used as input against output liability of GST on body building activity carried out by it. The consideration received by the job worker will be towards the manufacturing of the bus body on the chassis supplied by the Principal. GST La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Madhya Pradesh Goods Service Tax Act, 2017) 1. The present application has been filed u/s 97 of the Central Goods Services Tax Act, 2017 and MP Goods Services Tax Act, 2017 (hereinafter also referred to CGST Act and SGST Act respectively) by M/s. Sanghi Brothers(Indore) Private Limited (hereinafter referred to as the Applicant) , registered under the Goods Services Tax. 2. The provisions of the CGST Act and MPGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MPGST Act would be mentioned as being under the GST Act. 3. 4. BRIEF FACTS OF THE CASE: 3.1 The Applicant is registered with the Department having GSTIN 23AAKCS3060P1Z1 and is engaged in Trading activity of Motor Vehicles a complete vehicle with body duly fitted in the form of Truck, Buses and other complete vehicle by charging tax @ 28% in tax invoice. 3.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of provision of Sec. 8(a) of the CGST Act the same would be classified as supply of service under HSN 9988 The complete vehicle i.e the chassis and mounted body is sent back to the principle (no where the ownership is transferred to the job worker ) 5. CONCERNED OFFICER S VIEW POINT: The Concerned Officer Submitted that the rate of tax on the nature of work undertaken by the applicant will attract GST as per circular no. 52/26/2018-GST issued by CGST. 6. RECORD OF PERSONAL HEARING: 6.1 C.A. S.C. Bansal, Authorised Representative of the applicant for personal hearing the submissions already made in the application. The Applicant states that- As per the term defined u/s 2(68) of the CGST Act and as per para 3 of the CGST Act and as per para 3 of the schedule II of the CGST Act any treatment or process which is applied to goods of another persons is a supply of service. As per Sec. 2(68) of the CGST Act/ SGST Act. The term job worker means any treatment or process under taken by a persons on goods belonging to another registered persons and the expression job worker shall be construed accordingly . As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oat of paint is applied. In this case body is not made separately but is fabricated on chassis itself. Body requirement differ from party to party. It can not be treated as process of manufacturing merely because job worker is using its own inputs. GST Law does not distinguish between raw materials, finished goods and semi finished goods. It talks about input and and capital goods. Even semi finished goods or intermediates are and in turn input by the principal or job worker. Therefore merely because job worker is using its own input it is not job work. This is not according to the provisions of GST Law. From the above process one can reach to the conclusion that Fabrication and other work is done on chassis itself . It is not the case that any readymade body is fitted on chassis given by the owner. The ownership of chassis always remains with the applicant company who has given chassis for building and mounting of body on job work. Because it fulfils the main important condition of the definition of job work i.e. process undertaken on goods belonging to another registered persons . The whole process of body building and mount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1044 - AUTHORITY FOR ADVANCE RULING, GOA has held that the activity of building and mounting of the body on the chassis provided by the principal under FOC chalan will result in supply of services under HSN 9988 and hence, should be taxed @ 18% GST. 4). There is a judgement of Authority for Advance Ruling- Madhya Pradesh in the case of Arpijay Fabricators pvt. Ltd 2018 33 GSTJ 211 = 2018 (8) TMI 284 - AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH where it was held that if the predominant element to be the service part, then the principal supply would be classified under heading No 9988. In the judgement the Hon ble Authority in last para has mentioned that:- due to incomplete information provided by the applicant, The authority find itself constrained to provide any definitive ruling on this aspect. In this case the applicant did not provide desired information . The judgement based on incomplete information is not binding to all cases . On the basis of informations and submission the Hon ble Authority may differ from the earlier decision. 6.6. The Applicant summarized the argument as follows- 6.6.1. The appellant is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act of fabrication of body to be mounted on the chassis by a job worker. As per the term of the contract the chassis will be delivered by the applicant(Principal) for the purpose of carrying out the body building on the chassis on delivery challan to the job worker. The job worker shall procure various goods such as metal sheets, plywood, seats, glasses, aluminium sections etc. as inputs for fabricating the bus body besides fabrication services. Once the body is built and mounted on the chassis by the job worker, the vehicle will be sent back to the Principal/the Applicant of the chassis after raising tax invoice towards body building charges on which GST will be charged separately. At no stage the ownership of the chassis will be transferred by the Principal to the job worker and body built thereon will be nature of job work. 7.3 The job worker will claim the credit of GST paid on the material used as input against Output liability of GST on body building activity carried out by it. The consideration received by the job worker will be towards the manufacturing of the body on the chassis supplied by the Applicant (Principal). 7.4 In this connection first of all we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under HSN 9988 The complete vehicle i.e the chassis and mounted body is sent back to the principle (no where the ownership is transferred to the job worker). 7.10 We Find that the activity and question raised before us has been suitably clarified and dealt with Circular no. 52/26/2018-GST issued by Government of India, Ministry of Finance, Department of Revenue dated 9th August, 2018. 7.11 The following Paras of the above mentioned circular the issue has been dealt with which are as follow 1. Applicable GST rate for bus body building activity: Representations have been received seeking clarifications on GST rates on the activity of bus body building. The doubts have arisen on account of the fact that while GST applicable on job work services is 18%, the supply of motor vehicles attracts GST @ 28%. 2. Fabrication of body may involve the following two situations: a) A vehicle body builder builds a vehicle, working on the chassis owned by him and supplies the built-up vehicle to the customer, and charges the customer for the value of the bus. b) A vehicle body builder builds body on chassis provided by the principal for bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
