Bus Body Building on Customer Chassis: Supply of Service under GST

The Authority determined that Bus Body Building on a job work basis, using chassis provided by customers, constitutes a supply of service attracting 18% GST under SAC Code 9988. This classification was based on the treatment of the chassis as semi-finished goods and the application of fabrication on the customer's chassis. As a result, the applicable rate of GST for the supply of goods was deemed irrelevant, and the activity was considered a service under the provisions of the CGST & SGST Act.

---

---

Issues:
- Determination of whether the activity of Bus Body Building on job work basis, on the chassis supplied by the customer, constitutes supply of goods or supply of service.
- Identification of the applicable rate of GST if the activity is classified as supply of goods.
- Identification of the applicable rate of GST if the activity is classified as supply of services.

Analysis:
1. Nature of Activity - Supply of Goods or Supply of Service:
The Authority reviewed the nature of the activity of Bus Body Building on job work basis using chassis provided by customers. It was established that as per Circular No.52/26/2018-GST, two scenarios exist: a) where the builder owns the chassis and supplies the completed bus, and b) where the builder fabricates the body on the customer's chassis. The latter scenario is deemed a supply of service attracting 18% GST. The treatment of the chassis as semi-finished goods and the application of fabrication on the customer's chassis were key factors in determining the activity as a service under SAC Code 9988.

2. Applicable Rate of GST for Supply of Goods:
Given the ruling that the activity falls under the category of supply of service, the determination of the applicable rate of GST for supply of goods was deemed irrelevant. This decision was based on the classification of the activity as a service under the provisions of the CGST & SGST Act.

3. Applicable Rate of GST for Supply of Services:
As the Authority concluded that the Bus Body Building activity on job work basis is a service covered under SAC Code 9988, it attracts 18% GST. This determination was in line with the definition of job work under Section 2(68) of the CGST & SGST Act and Schedule II of the same Act, which considers any treatment or process applied to another person's goods as a supply of service.

In conclusion, the Authority ruled that the activity of Bus Body Building on job work basis, using chassis provided by customers, is classified as a supply of service attracting 18% GST under SAC Code 9988. The decision was based on the legal definitions and provisions outlined in the CGST & SGST Act, as well as relevant circulars clarifying the distinction between supply of goods and supply of services in such scenarios.

---