TaxTMI 
TaxTMI 
2023 (3) TMI 423
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....is applicable rate of GST? c) If it is supply of services, what is the applicable rate of GST? At the outset, we would like to make it clear that the provisions of both the CGST Act and the PGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the PGST Act. 2. STATEMENT OF RELEVANT FACTS - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- The applicant is engaged in Tipper Body Building and Fabrication and mounting the same on the Chassis supplied by the customers. The customers purchase chassis and handover to the applicant's factory shed for fabricating the Tipper Body and mounting the same on the said chassis. On receipt of chassis, a work order with the specifications of the Tipper Body is raised and on acceptance of the customer, all kind of input materials used for structural fabrication e.g., Tipping Kit, Iron & Steel Angle, Channel, Plate, Sheets Aluminium Sheets, Ply Wood, Wood, Glass Nut Bolts, Paints and Mise. Other spares & stores and hardware goods etc. are purchased....
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....harges fabrication charges (including certain material that was consumed during the process of job-work). 12.3 In the above context, it is hereby clarified that in case as mentioned at Para 12.2(a) above, the supply made is that of bus, and accordingly supply would attract GST @28%. In the case as mentioned at Para 12.2(b) above, fabrication of body on chassis provided by the principal (not on account of body builder), the supply would merit classification as service, and 18% GST as applicable will be charged accordingly. So the Applicant sought clarification by way of AAR as to whether he should consider the work of Building and Fabrication of Tipper Body and mounting the same on the chassis owned and supplied by the customer, as supply of goods covered under Tariff Item No. 8707 or consider it as Supply of Services covered under Tariff Item 9988?." 3. Submission of the Department- The Assistant Commissioner of State Taxes, Ludhiana-1 has furnished his written comments on behalf of the department vide letter no. 566 dated 2-2-2022 as below:- 3.1 M/s Raj Agro Aids, is a proprietor firm, having registered address at Lalheri road, Khanna having GSTIN: 03AFIPS6804F1ZJ. 3.2 As ....
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.... 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". 3.6.4 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. 3.6.5 Sec. 8(a) determines 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 supply;" 3.6.6 The circular No 34/8/2018/GST dated 3rd March 2018 issued by the CBIC clarified the matter as under: - Issue Clarification Whether activity of Bus Body building is a supply of goods or Services In the case of bus body building there is a supply of goods & Service Thus classification of this composite Supply as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of....
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.... 12.3 In the above context, it is hereby clarified that in case as mentioned at Para 12.2(a) above, the supply made is that of bus, and accordingly supply would attract GST @28%. In the case as mentioned at Para 12.2(b) above, fabrication of body on chassis provided by the principal (not on account of body builder), the supply would merit classification as service, and 18% GST as applicable will be charged accordingly. 3.7 After going through all the above said facts, it can be stated that in case of M/s Raj Agro Khanna in particular, the body building and mounting of body on the chassis of different models of Tippers, Tankers, Trucks and Trailers may be viewed as supply of goods and to be taxed @ 28% under the classification of "Bodies" as per HSN 8707. Yet as Circular No. 34/8/2018/GST dated 3rd March, 2018 states that "in the case of body building there is a supply of goods & Service. Thus classification of this composite supply as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case" may be followed in general. 4. HEARING Personal hearing in the matter was held on 03.02.2022. Sh. ....
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.... mounting the same on chassis owned and supplied by the customers with installation services as Supply of Goods and thereby classifying the same under Tariff Item No. 8707 and charging GST @ 28%. 5.4 In this regard, we find that Circular no. 52/26/18-GST dated 9th August, 2018 provides a clarification regarding applicability of GST on various goods and services which includes Bus Body Building as the supply of motor vehicle or job work. Hie said circular is reproduced below which is reproduced as under:- "12.1 Applicable GST rate for bus body building activity: Representations have been received seeking clarifications on GST rates on the activity of bus body building. The doubts have arisen on account of the fact that while GST applicable on job work services is 18%, the supply of motor vehicles attracts GST @ 28%. 12.2 Buses [motor vehicles for the transport of ten or more persons, including the driver] fall under headings 8702 and attract 28% GST. Further, chassis fitted with engines [8705] and whole bodies (including cabs) for buses [8707] also attract 28% GST. In this context, it is mentioned that the services of bus body fabrication on job work basis attracts 18% GST on s....