2020 (10) TMI 768

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.... M/s. Tube Investments of India Ltd., Dare House, 234B NSC Bose Road, Chennai 600001. (hereinafter referred to as 'Applicant') are registered under GST vide GSTIN No. 33AADCT1398N1ZX. The Applicant has preferred this application for seeking Advance Ruling on the following Question: Whether the activity of building and mounting of the body on the chassis made available by the customers will result in supply of goods or supply of services. The Applicant has submitted the copy of application in Form GST ARA - 01 and submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/ - each under Sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2. The applicant has stated that they are a listed company engaged in the business of manufacture and sale of cycles, metal forming products, tube products, and chains and also undertake the activity of body building for various customers across India. The customers of the applicant predominantly comprise of fleet owners who require trucks for use in their business of transportation of goods. The two stages involved in the manufacture of trucks are a. Manufacture of Chassis; ....

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....rame. The purpose of erection of sub-frame over the chassis is to ensure that the load body consisting of the sub-frame ultimately integrates with the chassis accurately without any need for re-work. Once the load body is built on the sub-frames, it would be painted and thereafter, will be mounted on to the chassis. 2.3 On the applicant's understanding of law, it is stated that they undertake supply of service of job work by way of building the cabin and load body over the chassis provided by customers. Although, they subcontract the activity of body building to their vendors, the privacy of contract for undertaking the body building activity as regards the customers is with the applicant only. The activity undertaken by them qualifies as a job work and thus, in terms of Section 7 (1A) read with clause 3 of Schedule II to the CGST Act, the same will be deemed to be a supply of service under GST. The concept of job work' under the GST regime entails a treatment or process to be carried out 'on' the goods belonging to the principal. Also as per Section 2(68) of CGST Act, 2017 which defines Job Work the following three conditions have to be cumulatively fulfilled fo....

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....ding a body on the automobile chassis made available by the principal manufacturer will amount to job work. The applicant has also referred to various other judgments viz JBM Auto Ltd V CST Delhi = 2018 (1) TMI 1162 - CESTAT CHANDIGARH; Kamal Coach Works Pvt Ltd V CCE Jaipur = 2017 (12) TMI 1087 - CESTAT NEW DELHI; Sita Singh & Sons Pvt Ltd V Commissioner of Cex & ST, Delhi = 2018 (6) TMI 1293 - CESTAT CHANDIGARH and AAR ruling of Goa, Kerala, Madhya Pradesh in case of Automobile Corporation of Goa Ltd = 2018 (10) TMI 1044 - AUTHORITY FOR ADVANCE RULING, GOA, Kondody Autocraft (India) Pvt Ltd = 2019 (4) TMI 110 - AUTHORITY FOR ADVANCE RULINGS, KERALA, M/s Sanghi Brothers (Indore) Pvt Ltd = 2019 (7) TMI 45 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH & M/s Rohan Coach Builders = 2019 (7) TMI 41 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH respectively. 2.5 The applicant has stated that in Circular No.52/26/2018-GST it has been clarified that the activity of body building on the chassis provided by the principal will qualify as supply of service and not supplies of goods and attracts GST at the rate of 18%. In light of the aforementioned facts the applicant has contended that ....

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....nd Form 22-A as per Motor Vehicles Act. 3.2 In furtherance, to the PH held on 30.08.2019 the applicant submitted the following documents on 23.09.2019 i. Entire documentation trail starting from receipt of the chassis by the third-party vendor up to delivery of fully built truck in respect of a particular transaction with clarification ii. Invoice raised, check list issued by the chassis manufacturer on E2E Supply chain solutions Ltd [E2E], insurance taken by E2E for the said chassis, Body building certificate and form 22A certificate dated 15.05.2019 issued by the applicant as evidences that the chassis is owned by the customer, i.e., E2E only. iii. In response to the query raised by the authority in the PH held on 30.08.2019 regarding the standard condition "The purchase order is subject to satisfactory financing of the purchase of the chassis", the applicant has submitted that the aforesaid condition has been included by the customer i.e E2E in the purchase order issued by them to the applicant only to convey their intention of not proceeding with the contractual agreement in a situation where E2E fails to receive the requisite financing sought from....

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....y by the third party vendors. The Purchase Order placed on the applicant is for building the body on the chassis and the applicant is before us requiring clarification as to whether the activity of building the body on the chassis of their customer is a supply of goods or supply of service. 6.2 The above facts stated by the applicant has been verified by the State Tax officer, who after undertaking physical verification has reported that the chassis is owned by the customer who approaches the applicant for body works. The supply required of the applicant is completion of body works with own materials. The applicant contends that the activity qualifies as job work' and therefore it is a supply of services under GST. The relevant provisions of CGST/ TNGST Act 2017related to 'Jobwork' are extracted below for ease of reference Section 2(68) of CGST Act 2017 defines job work as "job work" means any treatment or process undertaken by a person on goods belonging to another registered person and the expression "job worker" shall be construed accordingly; Definition of goods under Section 2(52) is as follows: "goods" means every kind of movable....