Bulletproof body building on vehicles: GST classification as service not goods

The case involved the classification of bulletproof body building on vehicles for GST purposes. The applicant initially classified the activity under the "goods" category, charging GST at 28%. However, an audit objection suggested it should be classified as a "service" attracting 18% GST. The ruling determined that the activity constitutes a supply of service under service head SAC 9988 (ic), attracting GST at 18%. The issue of refund for excess GST charged was deemed outside the Authority for Advance Ruling's purview.

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Issues Involved:

1. Classification of the activity of bulletproof body building on vehicles.
2. Determination of the applicable GST rate for the activity.
3. Eligibility for refund of excess GST charged.

Issue-wise Detailed Analysis:

1. Classification of the Activity:

The applicant is engaged in the manufacture of bulletproof glass, bulletproof vehicles, and other related items. The primary activity under scrutiny involves armoring vehicles supplied by customers (mainly the army/police) by building bulletproof bodies on the chassis provided. The process includes removing existing covers, fitting bulletproof frames and glass, and bulletproofing various compartments and components of the vehicle.

The applicant initially classified this activity under the "goods" category, specifically under tariff heading 87079000, and charged GST at 28%. However, an audit objection was raised, suggesting that the activity should be classified as a "service" under service category 9988, attracting a GST rate of 18%.

2. Determination of Applicable GST Rate:

The applicant's activity was scrutinized under the provisions of the CGST Act, 2017. Section 2(68) defines job work as any treatment or process undertaken on goods belonging to another registered person. Schedule II of the CGST Act specifies that any treatment or process applied to another person's goods is treated as a supply of service. Additionally, the CBIC Circular No. 52/26/2018-GST clarified that fabrication of body on chassis provided by the principal is classified as a service, attracting 18% GST.

The ruling concluded that the activity of bulletproof body building on chassis supplied by the customer is a supply of service under service head SAC 9988 (ic), attracting GST at 18%.

3. Eligibility for Refund of Excess GST Charged:

The applicant had charged GST at 28% for the completed work but faced an audit objection that suggested the correct rate should be 18%. The customer sought a refund for the excess GST charged. However, the ruling clarified that the issue of refund falls outside the purview of the Authority for Advance Ruling as defined under Section 97(2) of the CGST Act, 2017.

Ruling:

1. The activity of bulletproof body building on vehicles supplied by the customer is classified as a supply of service, attracting GST at 18% (SGST 9% + CGST 9%).
2. The question related to the refund of tax is outside the scope of the Authority for Advance Ruling under Section 97(2) of the CGST Act, 2017, and no ruling is provided on this matter.

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