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of <h1>Bus body building on customer-supplied chassis classified as service under Schedule II attracting 18% GST</h1> <h3>In Re: M/s. Royal Coach Builders</h3> In Re: M/s. Royal Coach Builders - TMI Issues Involved:1. Whether the activity of Bus Body Building on the chassis supplied by the customer on a job work basis is a supply of service or supply of goods.2. If it is a supply of service, what is the applicable rate of GST and its SAC code.3. If it is a supply of goods, what is the applicable rate of GST and its HSN.Detailed Analysis:1. Nature of Supply:The Applicant, a Proprietrix Concern engaged in bus body building, sought a ruling to determine whether their activity of bus body building on customer-supplied chassis constitutes a supply of service or goods. The Authority examined the process where the Applicant receives chassis from customers, fabricates the bus body as per specifications, and returns the completed bus. The Applicant contended that this activity qualifies as job work, thus constituting a supply of services under the CGST Act, 2017.The relevant legal provisions include:- Section 2(68): Defines 'Job work' as any treatment or process undertaken by a person on goods belonging to another registered person.- Schedule II, Clause (3): Specifies that any treatment or process applied to another person's goods is a supply of services.- Explanation to Section 143: Clarifies that for job work, input includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or the job worker.The Authority concluded that the activity of bus body building on the customer-supplied chassis is a supply of services, as the ownership of the chassis remains with the customer and the Applicant only provides fabrication services.2. Applicable GST Rate and SAC Code:The Applicant referenced previous AAR rulings and a CBIC Circular (No. 52/26/2018-GST, dated 09.08.2018) which clarified that bus body building on a customer-supplied chassis is a service attracting 18% GST. The service is classified under SAC 998881 - 'Motor vehicle and trailer manufacturing services.'The Authority reiterated that the activity falls under SAC 998881 and attracts 18% GST (9% CGST and 9% SGST), as confirmed by the Circular and previous rulings.3. Supply of Goods and Applicable Rate:Since the activity was determined to be a supply of services, the question of it being a supply of goods and the applicable HSN did not arise.Conclusion:The Authority ruled that the activity of bus body building on the chassis supplied by customers is a supply of service under SAC 998881, attracting 18% GST (9% CGST and 9% SGST). The ruling is binding unless the law, facts, or circumstances change, and any appeal against this ruling must be filed within 30 days.
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