TMI Blog2022 (10) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... a 3 of Schedule II of the CGST Act, 2017 as a treatment or process which is applied to another person's goods and accordingly is a supply of services. Classification of the activity and the rate of GST applicable - HELD THAT:- As per the Scheme of Classification of Services notified as Annexure to Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 the Heading [Service Accounting Code] - 9988 pertains to manufacturing services on physical inputs (goods) owned by others. The Explanatory Notes to the Scheme of Classification of Services states that the services included in the Heading 9988 -Manufacturing services on physical inputs owned by others - are services performed on physical inputs owned by units other than the unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The applicant requested an advance ruling on the following: 3.1. Whether the activity of commercial vehicles body-building on a job-work basis, on the chassis supplied by the customer, is a supply of goods or a supply of services? 3.2. If it is a supply of goods, what is the applicable rate of GST? 3.3. If it is a supply of services, what is the applicable rate of GST? 4. Contentions of the Applicant: 4.1. The applicant submitted that they are engaged in the business of bodybuilding of commercial vehicles used for carrying goods. In the normal course of trade, the customers purchase the chassis and hand it over to the applicant for fabricating the vehicle's body. The applicant on receipt of the chassis fabricates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore will squarely fall under Paragraph 3 of Schedule II. It is also pointed out that the applicant's activity falls within SAC 9988, ie manufacturing services on physical inputs (goods) owned by others. 4.3. Further the applicant also places reliance on Circular No.52/2018, which clarified the fabrication of buses into two situations as follows:- a. Bus body builder, working on a chassis owned by him and supplies the built bus to the end customer and charges the customer for the value of the bus. In this situation, the supply made is that of the bus and attracts 28% GST. b. Bus body builder, builds on chassis provided by the principal for bodybuilding and realizes fabrication charges, including certain materials that were c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of services or supply of goods. 7.2. As per Para 3 of Schedule II of the CGST Act, 2017 which lists out the activities or transactions to be treated as supply of goods or supply of services; any treatment or process which is applied to another person's goods is a supply of service. In the instant case, the applicant is building a body of commercial vehicle for carrying goods on the chassis supplied by the customer as per the specifications of the customer. The applicant is collecting the charges for the activity which include the cost of inputs / material used by the applicant and the labour charges for the fabrication of the body. Thus it is evident that the applicant is fabricating the body on the chassis belonging to the custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , not the value of the goods manufactured. SAC - 99888 under Heading 9988 pertains to Transport equipment manufacturing services and Sub - Heading 998881 pertains to Motor vehicle and trailer manufacturing services. Therefore, the activity of the applicant as discussed above is appropriately classifiable under Service Accounting Code 998881. 7.4. Accordingly, the activity is liable to GST at the rate of 18% [9% CGST + 9% SGST] as per entry at SI No. 26 (iv) - 9988 - Manufacturing services on physical inputs (goods) owned by others - Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. Giv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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