Ruling: Supply classified as 'Goods' not 'Service', HSN code 7309, GST 18%. Circular not applicable.

The ruling determined that the nature of the supply in the case was classified as 'Supply of Goods' rather than 'Supply of Service'. The correct HSN code for the supply was identified as 7309, with an applicable GST rate of 18%. As a result, Circular No. 126/45/2019-GST was deemed not applicable. The ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh.

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Issues Involved:
1. Classification of supply as 'Supply of Goods' or 'Supply of Service'.
2. Applicability of Circular No. 126/45/2019-GST dated 22/11/2019.
3. Correct HSN/SAC code applicable.
4. Applicable Rate of Tax of GST.

Detailed Analysis:

Issue 1: Classification of Supply
The applicant, engaged in fabricating tanks from steel sheets supplied free of cost by IOCL, also uses self-procured items (e.g., angle stiffeners, hexagonal bushings, lifting eyes, brackets, consumables like welding electrodes, and gas). The applicant transports steel plates from IOCL to their works and delivers the fabricated tanks back to IOCL. The primary question is whether this activity constitutes a 'Supply of Goods' or 'Supply of Service'.

The applicant initially classified the supply under HSN Code 7309 (supply of goods) with an 18% GST rate but also suggested that the activity falls under SAC 9988 (manufacturing services on physical inputs owned by others) with an 18% GST rate up to 30.09.2019.

The authority observed that the applicant uses substantial self-procured items in the fabrication process, making it a supply of goods rather than a service. The final product (tank) is distinct in name, character, and use from the initial steel plates, thus constituting manufacturing.

Issue 2: Applicability of Circular No. 126/45/2019-GST
Given the classification of the supply as 'Supply of Goods', the question of the applicability of Circular No. 126/45/2019-GST, which pertains to job work services, does not arise.

Issue 3: Correct HSN/SAC Code
The correct HSN code for the supply is determined to be 7309, which pertains to "Reservoirs, tanks, vats and similar containers for any material (other than compressed or liquefied gas), of iron or steel, of a capacity exceeding 300 liters, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment."

Issue 4: Applicable Rate of Tax of GST
Based on the classification as 'Supply of Goods' under HSN 7309, the applicable rate of GST is 18% (9% CGST and 9% SGST or 18% IGST).

Ruling:
1. Nature of Supply: The nature of supply is 'Supply of Goods'.
2. Applicability of Circular No. 126/45/2019-GST: Not applicable as the nature of supply is 'Supply of Goods'.
3. Correct HSN/SAC Code: HSN 7309.
4. Applicable Rate of Tax of GST: The rate of GST is 18% (9% CGST & 9% SGST or 18% IGST).

This ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh and subject to the provisions under Section 103(2) of the CGST Act, 2017 until declared void under Section 104(1) of the Act.

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