TaxTMI 
TaxTMI 
2019 (7) TMI 45
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....purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MPGST Act would be mentioned as being under the GST Act. 3. 4. BRIEF FACTS OF THE CASE: 3.1 The Applicant is registered with the Department having GSTIN 23AAKCS3060P1Z1 and is engaged in Trading activity of Motor Vehicles a complete vehicle with body duly fitted in the form of Truck, Buses and other complete vehicle by charging tax @ 28% in tax invoice. 3.2. The applicant is giving chassis of the bus/truck on FOC basis under the cover of delivery chalan to a body builders namely M/s. Arpijay Fabricators Pvt. Ltd, whose works is situated at Pithampur Dist Dhar and registered vide GSTN 23AAECS9992CIZS known as job worker. 3.3 The job worker is building bodies of various vehicle over the chassis provided by the principal on job work basis. Job worker is doing job work on the goods belonging to principal and accordingly above transaction is covered under service category. Though during the course of body building some tangable and non tangable material have been used. The job worker sent back fully built vehicles to the principal and billed for the same after charging GST @ 28%. 3.4 The co....
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....ocess which is applied to goods of another persons is a supply of service. As per Sec. 2(68) of the CGST Act/ SGST Act. The term job worker means" "any treatment or process under taken by a persons on goods belonging to another registered persons and the expression job worker shall be construed accordingly". As per Sec. 2(30) "composite supply "means supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply" As per Sec. 2(90)Principal supply "means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary". Sec. 8(a) determined tax liability on composite supply which reads as under: "The Tax liability on a composite or a mixed supply shall be determined in the following manner, namely:- A composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal suppl....
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....n important condition of the definition of job work i.e. process undertaken on goods belonging to another registered persons . The whole process of body building and mounting is performed on the goods (Chassis) belonging to the applicant therefore it is purely job work. Once it is established that it is a job work then it is supply of service. Even if it is composite supply of goods and services. The predominant intention of the principal is to get services. Utilizing and consuming tengible and non tengible goods is incidental to main/principal supply and therefore as per the provision of Sec. 8(a) in case of composite supply tax is being levied at the rate applicable to principal supply. In this case the principal supply is supply of service. Thus, it should be classified as services and tax is @ 18% under CGST Act. 6.4. Here it is also important to note that principal is charging @ 28%GST under HSN Code 8707 on supply of a complete vehicle but body building for him is a receipt of service and duly covered under HSN Code 9988 where the rate of tax is applicable @ 18% under GST Law. The circular No 34/8/2018/GST dated 3rd March 2018 issued by the Govt' of India Ministry of Financ....
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.... builders who are building body and mounting the same on the chassis belonging to principal. During the course of body building some Tengible and non-tengible material have been used by the job worker. The job worker sent back complete vehicle (i.e. chassis + Motor body) to the principal and billed for the body building charges. 6.6.2. Any treatment or process Which is applied to goods of another person is job work and supply of service. 6.6.3. As per the process of body building, some goods are used by job worker Therefore it is composite supply consisting of small part of supply of goods and major part of supply of services. As per the provision of Sec. 8(a) of CGST Act the same should be classified as supply of services under HSN-9988 which attracts Tax @ GST. 6.6.4. Your honour's attention is drawn on process of body building and mounting the same on chassis. Where the builder first make the pipe structure and mount the same on chassis. Outer paneling is done with G.P. Sheets and interior panelling with colour coated GP Sheets. Flooring with chequered Plywood, after primer painting the final coat of paint is applied. In this process body is not made separately but is fabrica....
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....2017 which reads as under "For Purpose of job work, input includes intermediate goods arising from any treatment or process carried out on the inputs by the principal or job worker 7.5 In the instant case the job worker shall procure various goods such as metal sheets, plywood, seats, glasses, aluminium sections etc. as inputs for fabricating the bus body besides fabrication services. Once the body is built and mounted on the chassis by the job worker, the vehicle will be sent back to the Applicant/Principal after raising tax invoice towards body building charges on which GST will be charged separately. At no stage the ownership of the chasis will be transferred by the Applicant to the job worker. The job worker will claim the credit of GST paid on the material used as input against output liability of GST on body building activity carried out by it. The consideration received by the job worker will be towards the manufacturing of the bus body on the chassis supplied by the Principal. 7.6 It has been held in the case of Prestige Engineering(lndia) Ltd. Vs. CCE on Merut [1994 (73) ELT 497(SC)] = 1994 (9) TMI 66 - SUPREME COURT, addition or application of items by job worker would ....