In re Hasmukhlal Jivanlal Patel (GST AAR Gujarat)
Activity of fabrication & mounting of Tanker and Tripper on chasis supplied and owned by principal is supply of Service
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. In cases where the chassis is provided/supplied by an unregistered principal to the applicant for carrying out the fabrication and mounting work on the chasis owned by them, such activity is covered under the description “Manufacturing services on physical inputs (goods) owned by others” as appearing at Sr. No. 26(iv) of Notification No. 11/2017 Central Tax (Rate) as amended vide Notification No. 20/2019- Central Tax (Rate) and the applicable rate would be 18%.
We find that the above position has also been clarified under Circular No. 126/45/2019-GST dated 22.11.2019 and the relevant text of the clarification is as follows:
In view of the above, it may be seen that there is a clear demarcation between scope of the entries at item (id) and item (iv) under heading 9988 of Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017. Entry at item (id) covers only job work services as defined in section 2 (68) of CGST Act, 2017, that is, services by way of treatment or processing undertaken by a person on goods belonging to another registered person. On the other hand, the entry at item (iv) specifically excludes the services covered by entry at item (id), and therefore, covers only such services which are carried out on physical inputs (goods) which are owned by persons other than those registered under the CGST Act.
The above clarification clearly shows that the activity of manufacturing services on physical inputs owned by others would be classifiable under ‘Job-work’ services in case the goods are received from Registered person and ‘Other Manufacturing Services’ in case the goods are received from Unregistered person.
In view of above Activity of fabrication and mounting of Tanker and Tripper on the chasis supplied and owned by the principal is supply of Service
