In re Kailash Vahn Private Limited (GST AAR Maharashtra)
Summary: The Maharashtra Authority for Advance Ruling held that the transactions of Kailash Vahn Private Limited examined before it constituted a composite supply whose principal supply was motor vehicle bodies, classifiable as goods under HSN 8707. Fabrication, mounting on customer-owned chassis, finishing and allied services were ancillary to that supply. The Authority rejected classification of these transactions as job-work services under SAC 998881. Its operative answer records GST at 28% under the earlier goods-rate notification and at 18% with effect from 22 September 2025 under Serial No. 543 of Schedule II to Notification No. 09/2025-Central Tax (Rate), dated 17 September 2025.
The applicant fabricated bodies for trucks, tippers, dumpers and special-purpose vehicles, including garbage compactors. Chassis were supplied free of cost by original equipment manufacturers or independent customers and remained their property; the completed vehicles were also owned and registered by those principals. The applicant purchased the other materials, fabricated sub-frames and body structures, mounted the bodies, integrated hydraulic or other equipment and carried out painting and finishing. It received consolidated consideration under purchase orders and argued that customer ownership of the chassis and completed vehicle established job work.
The applicant relied on Section 2(68), Section 143 and paragraph 3 of Schedule II to the CGST Act. It submitted that its activity was treatment or processing of another registered person’s goods and that use of its own materials did not change its character. It invoked Circular No. 52/26/2018-GST, dated 9 August 2018, and Notification No. 26/2019-Central Tax (Rate), dated 22 November 2019, which extended the expression “bus body building” to body building on chassis of any Chapter 87 vehicle. It sought classification under SAC 998881 and clarification whether the 18% service rate arose under entry 26(ic) or 26(iv) of Notification No. 11/2017-Central Tax (Rate). It also cited earlier advance rulings and judgments in support of its claim.
The jurisdictional officer opposed the application’s proposed classification. According to the officer, the applicant manufactured an independently identifiable load body from its own materials and supplied it for consideration, with mounting on the principal’s chassis being incidental. The officer therefore proposed classification as goods under HSN 8707. The Authority examined the actual purchase orders and tax invoices rather than treating chassis ownership as conclusive.
Tata Motors’ purchase order dated 1 October 2019 described “Load Body Assy”, specified 20,000 units at ₹1,01,447.34 each and recorded a contract value of ₹2,02,89,46,800. Delivery, quality, rejection and replacement obligations remained with the supplier, and payment depended on delivery and acceptance. Ujwal Automotives’ order dated 10 September 2021 concerned seven mounted load bodies at ₹1,27,000 each, with an ex-works value of ₹8,89,000 and 28% GST of ₹2,48,920. Mahindra & Mahindra’s orders similarly specified body assemblies, quantities, fixed unit prices, inspection and replacement obligations. A specimen invoice dated 2 September 2021 described a “5 CUM Tipper on LPK 912”, recorded that the chassis belonged to the customer and charged ₹2,00,000 plus 28% GST, totalling ₹2,56,000.
The Authority considered the descriptions of finished assemblies, quantities in units, fixed prices, transfer of manufacturing and delivery risks, and acceptance-linked payment to demonstrate that the contractual object was supply of vehicle bodies. It found that the applicant’s own materials and integrated design, fabrication, assembly and finishing activities produced a distinct commercial commodity. In its reasoning, the customer’s chassis served as the base for mounting; ownership of that chassis did not determine the character of the body supplied.
Applying Sections 2(30), 2(90) and 8(a), the Authority treated the naturally bundled transaction as a composite supply with vehicle bodies as the predominant element. It held that the applicant’s transactions went beyond mere treatment or processing of customer goods. It rejected reliance on paragraph 3 of Schedule II in this factual setting. It also held that the 2019 notification presupposed an activity otherwise classifiable as a service and did not override the statutory composite-supply provisions. The 2018 circular was distinguished because, in the Authority’s view, the contracts before it were for supply of bodies rather than fabrication services.
The first question—whether the activity could be treated as job work and supply of services under SAC 998881—was answered in the negative. The alternative service-rate question was consequently not applicable. On the third question, the Authority held that the principal supply was vehicle bodies under HSN 8707, covering bodies, including cabs, for vehicles of headings 8701 to 8705. Although its discussion referred to the earlier 28% rate, the operative ruling expressly recognised the 18% rate, comprising 9% CGST and 9% SGST, from 22 September 2025. The conclusion concerns the transactions and contractual documents examined in this application.
Cases Discussed
- In re Kailash Vahn Private Limited — Order No. 19/ARA/2024, dated 23 September 2024 (GST AAR Tamil Nadu). The applicant cited the ruling in its own Tamil Nadu registration in support of service classification.
- In re Tube Investments of India Limited — Order No. 27/ARA/2020, dated 12 May 2020 (GST AAR Tamil Nadu). Cited by the applicant concerning body building on customer-supplied chassis.
- In re SLN Tech-Fabs (Bengaluru) Private Limited — Order No. KAR ADRG 02/2020, dated 7 January 2020 (GST AAR Karnataka). Cited by the applicant for SAC 998881 treatment of tipper and trailer body building.
- In re Sanghi Brothers (Indore) Private Limited — Order No. 06/2019, dated 3 May 2019 (GST AAR Madhya Pradesh). Cited by the applicant concerning mounting vehicle bodies on principal-supplied chassis.
- In re Automobile Corporation of Goa Limited — Order dated 21 August 2018 (GST AAR Goa). Cited by the applicant for treatment of building and mounting bodies on chassis supplied free of cost as services.
- Prestige Engineering (India) Limited v. Collector of Central Excise, Meerut — 1994 (73) E.L.T. 497 (Supreme Court). Listed among the judgments relied upon by the applicant in support of its job-work contention.
- Kailash Engineering Company v. State of Gujarat — (1964) 15 STC 574 (Supreme Court). Listed among the judgments relied upon by the applicant regarding the character of body-building contracts.
- Mahindra Coach Factory Pvt. Ltd. v. CTO, Special Circle 3, Jaipur (Rajasthan High Court). Cited by the applicant; the source supplies no decision date, proceeding number or reporter citation.
