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TMI Blog2021 (8) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... 42 001. (hereinafter referred to as the 'Applicant j is registered under the GST Vide GSTIN 33AABCA6615K1ZU. They have sought Advance Ruling on the following question:- 1. Whether the activity of Bus Body Building on the chassis supplied by the customer on job work basis is a supply of service or supply of goods? 2. If it is supply of Service, what is the applicable rate of GST and its SAC code? 3. If it is supply of goods, what is the applicable rate of GST and its HSN? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are Private Limited Company engaged in bus body building activity. They get enquires from the customers for building a bus body on the chassis belonging to them on job work basis. On receipt of enquiry from customers, they will provide the quote according to the specification given by the customer. The customers will hand over the chassis (Ashok Leyland, TATA, EICHER etc.) purchased by them at the applicants' yard for fabrica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the roof of the bus, if any seepage it is arrested by suitable technical action. * (iv) As per drawings windows assembly, passenger seats, grab handles, stanchions, bus body ornamental fittings are fabricated in house and kept aside for assembly. * (v) Bus body is painted as per customer's colour choice and pattern such as yellow colour for educational institutions and white colour for private service bus. * (vi) All fitments such as windows, front windshield glass, rear windshield glass, handles, post, railings are fixed. Passenger seats are fixed as per seating layout approved by a customer. Lights, horns, decorative items are fitted. * (vii) Bus will put up for water leakage testing to ensure no water ingress is there inside the bus. Under body inspection were also carried out. * (viii) All the points are inspected by quality control department and ensured for quality assurance. * (ix) Bus body on customer chassis is offered for customer inspection and road trial for road worthiness. If any deviations found, the same will be rectified immediately. * (x) Fully built bus body mounted on customer chassis is delivered to customer with tax invoice, documents for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assis supplied by the Principal. The AAR vide order no. 03/2019 dated 10.04.2019 held that fabrication of bus body on the chassis to be supplied by the customer by collecting job work charges including inputs required for such fabrication work and in no case the ownership of the chassis will be transferred by Principal to the applicant will be taxable under SAC 998881 - "Motor vehicle and trailer manufacturing services" and under entry no. 26(ii) as "Manufacturing services on physical inputs (goods) owned by other" it is taxable @18% (9% under CGST and 9% under SGST Act). * Placed reliance on the order of Authority for Advance Ruling, Kerala in the case of M/s Kondody Autocraft (India) Pvt. Ltd. wherein the very same issue was considered and ruling given vide Order No.KER/39/2019 dated 02.03.2019 wherein it was held that the ownership of the chassis is not transferred to the job worker and the job worker uses his own goods for providing service of job work. The fabrication of body is a structure which is applied on the chassis supplied by the Customer and hence the activity of fabrication of body with material is also a service covered under SAC Code 9988 manufacturing services o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the applicants, comments of the State Jurisdictional authority and heard the arguments made by the applicant during the personal hearing. The ruling sought is on the following questions:- 1. Whether the activity of Bus Body Building on the chassis supplied by the customer on job work basis is a supply of service or supply of goods. 2. If it is supply of Service, what is the applicable rate of GST and its SAC code. 3. If it is supply of goods, what is the applicable rate of GST and its HSN? As the question is to determine the nature of supply, which is within the ambit of this authority under Section 97(2)(g) of the CGST Act, the same is taken up for decision. 7.1 The applicants are engaged in rendering services of constructing bus body over the chassis supplied by the customers according to their requirements. Once they receive enquiry from the customer, they offer the quotation containing Specifications, payment Terms, Time Schedule and Validity. If agreed upon, the Work Order is signed by both the parties (i.e) the applicant and the customers. The applicant undertakes mounting of bus body over the chassis supplied by the customer. 7.2 The above facts stated by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies certain activities to be treated as supply of goods or supply of services, in accordance to which "Any treatment or process which is applied to another person's goods is a supply of services. 7.5 In the instant case, the bus body fabricated and mounted on the chassis supplied by the customer is delivered back to the customer charging a lump sum amount as job work charges. It is to be noted that ownership of the chassis remains with their customers and will not be transferred to the applicant at any point of time. The consideration is received only towards fabrication services besides own materials involved in the fabrication. In view of the above discussion it is evident that the activity undertaken by the applicant for Bus Body Building on the chassis supplied by the customer is to be classified as Job Work as per Schedule II of the CGST Act 2017, the said activity of bus body building on the chassis supplied by the customer by the applicant is supply of services. 7.6 The clarification in circular No.52/26/2018 dated 09.08.2018 is relied upon by us for arriving at the above conclusion, wherein applicable GST on the bus body building activity is clarified as under:- "12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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