Tanker body assembly on customer chassis: GST service classification

The case involved determining whether building tanker bodies on customer-supplied chassis constitutes a supply of goods or services for GST purposes. The Authority concluded that the activity is a supply of service under Para 3 of Schedule II of the CGST Act, 2017. The ownership of the chassis remains with the customer, leading to classification under SAC 998881 and an 18% GST rate. The ruling confirmed that the activity is a service provided on another person's goods, attracting the specified GST rate.

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Issues:
1. Determination of whether the activity of tanker body building on a job work basis, on the chassis supplied by the customer, constitutes a supply of goods or a supply of service.
2. Applicable rate of GST if the activity is considered a supply of goods.
3. Applicable rate of GST if the activity is considered a supply of services.
4. Classification of the service code (tariff) for the activity of tanker body building carried out on the chassis of a motor vehicle owned by the customer.

Analysis:
1. The applicant contended that the activity of fabricating tanker bodies on chassis provided by customers should be treated as a supply of service under Paragraph 3 of Schedule II of the CGST Act, 2017. They argued that there is no transfer of ownership of the chassis, making it a service. The jurisdictional officer agreed that the activity is a supply of service covered under SAC Code 9988, attracting 18% GST.
2. The Authority determined that the applicant's activity of building tanker bodies on customer-supplied chassis constitutes a supply of service under Para 3 of Schedule II of the CGST Act, 2017. The ownership of the chassis remains with the customer throughout the fabrication process, leading to a conclusion that the activity is a service provided on another person's goods.
3. The Authority further classified the activity under Service Accounting Code 998881, which pertains to manufacturing services on physical inputs owned by others. The applicable GST rate was determined to be 18% (9% CGST + 9% SGST) as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
4. The ruling issued by the Authority confirmed that the activity of tanker body building on customer-owned chassis is a supply of service and falls under Service Accounting Code 998881 for classification purposes. The applicable GST rate for this service was set at 18% as per the relevant notification.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Authority's decision on each matter raised by the applicant.

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