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of <h1>Classification of bus body activities under GST: Goods vs. Services distinction clarified</h1> <h3>In Re: M/s. Tata Marcopolo Motors Ltd.,</h3> In Re: M/s. Tata Marcopolo Motors Ltd., - 2019 (27) G. S. T. L. 283 (A. A. R. - GST) Issues Involved:1. Classification of the activity of building and mounting of the body on the chassis – whether it results in supply of goods under HSN 8707 or supply of services under HSN 9988.Detailed Analysis:Issue 1: Classification of the ActivityApplicant's Contentions:- The applicant, engaged in building and mounting bus bodies on chassis, initially contended that the activity amounted to the supply of goods under HSN 8707, attracting 28% GST.- Later, citing Circular No. 52/26/2018-GST dated 09-08-2018, the applicant revised their stance, arguing that the activity should be classified as the supply of services under SAC 998882, attracting 18% GST.Facts Submitted by the Applicant:- The applicant procures various inputs and uses their own machines and manpower for the body-building activity.- The chassis is provided by the sender (OEMs/Retail customers) on a free-of-cost basis, and the ownership of the chassis remains with the sender.- The applicant can build the body independently of the chassis and later mount it when the chassis is provided.Applicant's Legal Arguments:- The activity does not constitute 'Job Work' as defined in Section 2(68) of the CGST Act, 2017, because the applicant uses their own goods for the body-building process.- The activity should be treated as a 'Composite Supply' where the principal supply is the body, thus classifying it as the supply of goods.- Alternatively, if considered a 'Mixed Supply,' it would attract the higher rate of GST applicable to the supply of goods.Authority's Findings:- The authority examined the process of building the body and mounting it on the chassis, considering both scenarios where the body is built independently and where it is built step-by-step on the chassis.- The authority referred to Circular No. 52/26/2018-GST, which clarifies that:- If the bus body builder builds a bus on a chassis owned by them and supplies the built-up bus, it is a supply of goods attracting 28% GST.- If the body builder builds the body on a chassis provided by the principal and charges fabrication charges, it is a supply of services attracting 18% GST.Judgment:1. Supply of Ready-Built Body and Mere Mounting on Chassis:- This activity is classified as the supply of goods under HSN 8707.- It attracts 28% GST.2. Step-by-Step Building of the Body on Chassis Provided by Owner:- This activity is classified as the supply of services under SAC 9988.- It attracts 18% GST.Conclusion:- The ruling clearly differentiates between the supply of goods and services based on the nature of the activity and the involvement of the chassis in the body-building process.- The authority's decision aligns with the provisions of the CGST Act and the clarifications provided in the relevant circulars, ensuring that the classification and applicable GST rates are appropriately determined.
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