Reducing GST on Body building/fabrication on tippers,Trucks, containers, etc. (HSN code number 8707).

[Rajesh Rao]

We are doing tipper body building work (8707 GST 28%) on chassis supplied by customer with assembling hydraulic cylinder for lifting the tipper body(using m.s. channels/sheets/angles for body building work and mounted the same on customer's chassis with hydraulic fitment. As per the Circular No. 52/26 2018-GST dtd 09.08.18 for bus body building they mentioned 18% GST for body building work under job work category 9988(chassis supplied by the customer). Hence please let me know whether can we make the bill under this category as we also doing the same job on customer chassis.

Please reply

Regards

For SJR TECHNOLOGIES

SUNDARA/RAJESH

[Ganeshan Kalyani]

2019 (7) TMI 45 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH IN RE: M/S. SANGHI BROTHERS (INDORE) PRIVATE LIMITED

Mounting of Bus/ Truck /Ambulance body on the chassis to be supplied by the Principal on delivery challan or any other owner of the chassis on which Bus/ Truck /Ambulance body will be fabricated by collecting job work charges including inputs required for such fabrication work and in no case the ownership of the chassis will be transferred by Applicant to the job worker will be taxable under SAC 998881 -“Motor vehicle and trailer manufacturing services” and under entry no. 26(ii) as -“Manufacturing services on physical inputs (goods) owned by other” it is taxable @18%(9% under CGST and 9% under SGST Act).

[KASTURI SETHI]

Dear Querist,

As per circular mentioned by you and on the basis of various decisions of AARs/AAARs on this issue, the person doing job-work will pay GST @ 18% and the person who supplies the complete bus will pay GST @28%. In other words, the principal is liable to pay @28%.There is no dispute/doubt about it. It is natural that Principal will also take ITC of GST paid to the job-worker and will pay GST on value addition.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

I agree with you. You have correctly posted the latest decision of AAR. This is with reference to your views expressed somewhere else against this very Issue ID.

AI Summary

GST on job-work motor vehicle body building: job-workers taxed at a reduced rate; principal supplying complete vehicle taxed higher.
Mounting or fabricating vehicle bodies on customer supplied chassis is treated as motor vehicle and trailer manufacturing services classified as manufacturing services on physical inputs owned by others and taxable at the job work manufacturing rate, while supply of a complete vehicle by the principal attracts the higher rate applicable to finished vehicle supply, with the principal able to claim input tax credit for GST paid to the job worker and pay tax on value addition.