In re Vasant Fabricators Pvt. Ltd. (GST AAR Gujarat)
Q1. Whether the activity of fabricating and mounting Tankers, Tippers, etc. on the chassis provided by the owner of such chassis i.e. bus body building would be covered under the category of Supply of Services?
A1. Supply of Bus body building on the chassis owned by customer is supply of Service.
Q2. If yes, the applicable accounting code of such services as per the Scheme of Classification of Services and the applicable rate of GST thereon.
A2. GST rate:
|
S.No |
Service Description | Notification 11/2017-CT(R) dated 28-6-17. | Service Code | GST rate |
| i. | Bus body building on chassis owned by GST registered customer. | Sr. no. 26(ic) | 998882 | 18% |
| . | Bus body building on chassis owned by unregistered customer | Sr. no. 26(iv) | 998882 | 18% |
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
M/s. Vasant Fabricators Pvt. Ltd. (referred to as ‘VFPL’ for the sake of brevity) submits that it is engaged in building bodies of various vehicles falling under Chapter 87 of the First Schedule to the Custom Tariff Act such as mounting of tankers, tippers etc. on chassis provided by the owner of such chassis, either registered or unregistered.
2. On receipt of such chassis, VFPL undertakes the following activities on such chassis:
(i) First the chassis of the Principal, either registered or unregistered, is received at VFPL registered premises. Thereafter, they make the drawing for type of the job to be undertaken and ascertain the type and quantity of materials required for the job. Depending on the work to be carried out i.e. Mounting of Tanker or Tipper, they place the order for purchase of the required materials such as steel sheets, nuts and bolts, etc. The steel sheets are then cut and bent as per the required dimensions and the bended edges are joined through the process of welding. In this manner, all the required parts are independently fabricated and then assembled to obtain the Tanker, Tipper, etc. Such tankers, tippers, etc. are then mounted on the chassis owned by the Principal.
3. VFPL has submitted that the activity undertaken by them is in the nature of working upon the goods i.e. chassis supplied by the Principal and converting the same into a Mounted Tanker, Tipper, etc. Therefore, the activity, as per their understanding, would be in the nature of supply of services. As per the Scheme of Classification of services in the Annexure to Notification No. 11/2017 Central Tax (Rate) and corresponding SGST/ IGST Notifications, their services would be covered under the main head of 9988 which reads as under:
“Manufacturing services on physical inputs (goods) owned by others”
The sub-group would be 99888 i.e. Transport equipment manufacturing services further classifiable under Service Code 998882 i.e. Other transport equipment manufacturing services.
3.1 VFPL has submitted that the applicable rate of GST, would be 18% in terms of Entry No. 26(ic) & (iv) of Notification No. 11/2017 CT(Rate) and submitted as under :
a) In cases where the chassis is provided by a Registered Person – Rate of tax 18% Entry number 26 in Notification No. 11/2017 Central Tax (Rate) as amended vide Notification No. 20/2019 Central Tax (Rate) dated 30.9.2019 specifies the rate of 18% in case the services are in the nature of job-work. The relevant entries are reproduced below:
