GST implications: Body building on chassis=service, 18% GST. Complete vehicles=goods, 28% GST.

The ruling determined that body building on a chassis provided by the principal constitutes a supply of service, attracting 18% GST. If the applicant owns the chassis and supplies the complete vehicle, it is considered a supply of goods. The GST rate for body building services is 18%, while for complete motor vehicles, it is 28%. The service code for body building on another person's chassis is SAC 9988, and for complete built-up vehicles on the applicant's chassis, it falls under HSN 87. Accident repairing jobs on vehicles supplied by the owner are classified under SAC 9987, subject to 18% GST. If body building is not deemed a service, it is treated as a supply of goods under HSN 87, with a GST rate of 28%.

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Issues Involved:
1. Classification of body building by fabrication on chassis owned by others.
2. Applicable GST rate for body building services.
3. Service Code (tariff) for body building on another person’s chassis.
4. Classification and GST rate for accident repairing jobs.
5. Nature of supply if body building is not considered a service.

Detailed Analysis:

Issue 1: Classification of Body Building by Fabrication on Chassis Owned by Others
The applicant is engaged in body building on chassis provided by others, charging lump-sum fabrication charges including materials consumed during the process. The applicant argues that this activity should be treated as a supply of service under Paragraph 3 of Schedule II of the CGST Act, 2017, which states, "any treatment or process which is applied to another person’s goods is supply of services." The applicant relies on CBIC Circular No. 52/26/2018-GST dated 09.08.2018, which clarifies that fabrication on chassis provided by the principal is a service, attracting 18% GST.

Issue 2: Applicable GST Rate for Body Building Services
The ruling confirms that the activity of body building on the chassis provided by the principal is a supply of service and is subject to 18% GST. This conclusion is based on the CBIC Circular No. 52/26/2018-GST, which differentiates between bus body building on a chassis owned by the builder (taxable at 28%) and on a chassis provided by the principal (taxable at 18%).

Issue 3: Service Code (Tariff) for Body Building on Another Person’s Chassis
The service of body building on another person’s chassis is classified under SAC 9988, specifically under "Manufacturing services on physical inputs (goods) owned by others," attracting 18% GST. This classification is supported by references to various Advance Rulings and the CBIC Circular.

Issue 4: Classification and GST Rate for Accident Repairing Jobs
For accident repairing jobs on vehicles supplied by the owner, the applicant charges a lump sum that includes the cost of material and labor. This activity is classified as a service under SAC 9987, specifically "Maintenance, repair and installation (except construction) services," attracting 18% GST. The ruling clarifies that the repair work constitutes a composite supply, with the principal supply being the repair service.

Issue 5: Nature of Supply if Body Building is Not Considered a Service
If the body building activity is not considered a service, it would be treated as a supply of goods. The complete body-built motor vehicle would be classified under HSN 87 (depending on the type of vehicle) and would attract 28% GST. This scenario applies when the applicant owns the chassis and supplies the complete built-up vehicle.

Ruling Summary:
A. Body building on the chassis provided by the principal is a supply of service. If the applicant owns the chassis and supplies the complete vehicle, it is a supply of goods.
B. The GST rate for body building services is 18%. For the supply of motor vehicles, the rate is 28%.
C. The service code for body building on another person’s chassis is SAC 9988. For complete built-up vehicles on the applicant’s own chassis, it is classified under HSN 87.
D. Accident repairing jobs on vehicles supplied by the owner are classified under SAC 9987, attracting 18% GST.
E. If body building is not considered a service, it is classified as a supply of goods under HSN 87, with a GST rate of 28%.

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