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2025 (5) TMI 900
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....ed by M/s KAMAL COACH WORKS PVT LTD, SP 282, PHASE II RIICO INDUSTRIAL AREA PO NEWAI, NEWAI, TONK - 304021, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97 (2) given as under: (a) classification of goods and/or services or both (g) whether any particular thing done by the applicant with respect to any goods and/or services or both amounts to or results in a supply of goods and/or services or both, within the meaning of that term A. SUBMISSION OF THE APPLICANT (in brief) :- Brief facts of the case : 1.1 M/s. Kamal Coach Works Private Limited [hereinafter referred to as "Applicant"] is a private limited company incorporated under the Indian Company Law and has its head office located at SP 282, Phase II, RIICO Industrial Area, Newai, Tonk, Rajasthan, 304 021, and its additional place of business located at RIICO Industrial Area Sitapura, E 523, Near Chatrala Circle, Jaipur, Rajasthan - 302 022. 1.2 The Applicant is engaged in the business of supplying job work services towards fabrication and attachment of Body of various commerc....
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....king job-work operation. A copy of the tax invoice issued by the Jamshedpur unit and a copy of the delivery challan issued by the local unit of Tata Motor are enclosed as Annexure-3 and Annexure-4 respectively. 1 • The scope of the processing to be undertaken by the Applicant is to fabricate and attach the tipper body to the vehicle. The said attachment is being done by the Applicant on/ to the chassis of the unfinished vehicle provided by Customer. The Tippers on which the Applicant performs its job work activity are unfinished vehicles such as 'Signa 2830.TK BSVI' and others as the requirement maybe from time to time. • For attaching the tipper body, the Applicant procures the required goods for developing the 'tipper body'. Given the standard size of the tipper body, the tipper body is already developed by the Applicant even without the physical presence of chassis. The different types of 'tipper body' manufactured by the Applicant including '24 Cube Box Body Tipper', '16 Box Body Tipper' etc. • The Applicant procures all the goods required for developing the 'tipper body' on his own account from the approved vendors of the Customer to ensu....
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.... that the scope of job-work and the applicable rate of GST on the body building activity is clarified vide the below Circulars issued by the CBIC: SI.No. Circular Clarification 1. CBEC Flyer No. 27 dated 01.01.2018 "Section 2 (68) of the CGST Act, 2017 defines job work as 'any treatment or process undertaken by a person on goods belonging to another registered person'. The one who does the said job would be termed as 'job worker'. The ownership of the goods does not transfer to the job-worker but it rests with the principal. The job-worker is required to carry out the process specified by the principal, on the goods." 2. Circular No. 38/12/2018-GST dated 26.03.2018 "5. Scope / ambit of job work: ... Further, it is clarified that the job worker, in addition to the goods received from the principal, can use his own goods for .providing the services of job work." - 3. Circular No. 52/26/2018-GST, dated 09.08.2018 "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....
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.... REGARDING QUESTION NO. 1 • At the outset, the Applicant submits that the provisions contained in the CGST Act are pari materia to the provisions of the RGST Act. Hence, any reference to the provisions of the CGST Act would imply the reference to the same provisions under the RGST Act, unless otherwise specified. • The term 'job work' is defined in Section 2 (68) of the CGST Act which reads as below: "Section 2 (68) "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." ... Emphasis Supplied • In view of the above definition, job work can be understood as performance or carrying out of any activity or treatment or work done by one person on the goods, which belongs to another person. • In view of the definition under Section 2 (68) of the CGST Act, the essential characteristics or test of job work can be understood as below: • There is some treatment or process done. • The treatment or process is done on goods. • The goods must belong to the person other than ....
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....s of Tata Motors to the premises of the Applicant. • Hence, the unfinished vehicles which are movable objects clearly qualify as 'goods' under Section 2 (52) of the CGST Act. • The unfinished vehicle with chassis is provided by Tata Motors to the Applicant on Free of Cost basis. • The ownership of the Chassis remains with Tata Motors at all time. • Hence, the activity performed by the Applicant is on goods belonging to another person namely, Tata Motors. • The Applicant had engaged its manpower and machinery for carrying out the fabricating, attaching and painting the 'tipper body' on/ to the chassis. The abovesaid activity qualify as 'process' or 'treatment' done by the Applicant on goods belonging to Tata Motors. • In light of the above, the activity performed by the Applicant duly qualify as 'job work' in terms of Section 2 (68) of the CGST Act. • The Applicant also rely upon the clarifications issued by the CBIC as below: C.B.E.C. Flyer No. 27 dated 01.01.2018 "What is Job work? Section 2 (68) of the CGST Act, 2017 defines job work as 'any treatment or process u....
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.... below: "25. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between 'strict interpretation' and 'literal interpretation'. We may reiterate at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute." ... Emphasis Supplied • The Applicant also relies on the decisions of Hon'ble Supreme Court in the ca....
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.... INTERPRETATION OF LAW REGARDING QUESTION NO. 2 • At the outset, the following provisions of the CGST Act requires attention: "Section 7 (1) For the purposes of this Act, the expression - "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;" "Section 2 (102) "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged." • The term 'supply' is defined under Section 7 (1) (a) of the CGST Act to include all forms of supply such as sale, exchange, barter, transfer, provision of facility, etc. for a consideration. • Further, the term 'services' is defined under Section 2 (102) of the CGST Act as anything other than goods. Hence, the definition and scope of 'services' is very wide to include any activity or wo....
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....c) Services by way of job work in relation to bus body building; Explanation - For the purposes of this entry, the term "bus body building" shall include building of body on chassis of any vehicle falling under chapter 87 in the First Schedule to the Customs Tariff Act, 1975. 9 Note: The above Explanation was introduced on the basis of 37th GST Council Recommendation and Notified vide Amendment Notification No. 26/2019-Central Tax (Rate) dated.22.11.2019. • The Explanation explicitly mentions that "bus body building" shall include building of body on chassis of any vehicle falling under Chapter 87 in the First Schedule to the Customs Tariff Act, 1975. The Tippers in the case on hand is classified under Chapter 87 of the Customs Tariff Act. • The Annexure to GST Rate Notification also clarifies the following: SI. No. Chapter, Section, Heading or Group Service Code (Tariff) Service Description 534 Group 99888 Transport Equipment Manufacturing Services 998881 Motor vehicle and trailer manufacturing services • Further, as per the Explanatory Notes to the scheme of cl....
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.... RJ Singh) 2023 (3) TMI 423 Tamil Nadu Tube Investments of India Ltd. 2020 (10) TMI 768 TVL Anamallais Engineering (P) Ltd 2021 (8) TMI 732 Royal Coach Builders 2023 (1) TMI 975 Uttar Pradesh Adithya Automotive Applications Pvt. Ltd. 2022 (1) TMI 151 Goa Automobile Corporation Of Goa Limited 2018 (10) TMI 1044 • Conclusion: In view of the above submissions, the activity performed by the Applicant shall be treated as supply of services. INTERPRETATION OF LAW REGARDING QUESTION NO. 3 • The Applicable rate of GST on supply of services is prescribed under the GST Rate Notification referred above and is dependent upon the tariff classification of the services. • As already explained above, the present services of the Applicant clearly fall under the tariff heading 998881. • Further, the applicable GST rate as per SI. No. 26 (i) (ic) of the said services classified under tariff heading 998881 would be 18%. • The Applicant also submits that as per the 37th GST Council Meeting held on 20.09.2019, it was clarified that with respect to job work services,....
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.... body builder builds a bus, working on the chassis owned by him and supplies the built-up bus to the customer, and charges the customer for the value of the bus. (b) Bus body builder builds body on chassis provided by the principal for body building, and charges 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." ... Emphasis Supplied • The above Circular has categorically classified into two categories as explained below: Category 1: In cases where the 'chassis' is owned by the body builder and the body building is also done by the body builder, then the applicable GST rate shall be 28%, treating it as supply of goods. Category 2: In cases where the 'chassis' is owne....
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....en filed by the Applicant with respect to its body building operations carried out with respect to the 'Tipper Trucks'. 3. Tipper Trucks are commercial vehicles which are used to carry goods [such as construction materials, garbage, etc.]. A fully built up 'Tipper Truck', will typically consist of chassis, engine, wheels, hydraulic cylinder, tipper body, etc. 4. In respect to the body building operations undertaken for Tipper Trucks, the Applicant receives the chassis provided by its customers on free of cost and returnable basis. At all times, the ownership of the unfinished vehicle remains with Customer. Post receipt of the chassis, the Applicant undertakes the necessary fabrication of the body and attaching the same on the chassis. That apart, the Applicant also mounts and installs 'hydraulic cylinder' to complete the 'tipper body' and thereafter the same is painted as per the requirement of the customers. The fabrication and attachment of the tipper body including hydraulic cylinder to the unfinished vehicle i.e. chassis is commonly referred to as 'Body Building Operations'. 5. With respect to the above said operations, the Applicant procures all the goods required for....
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....has engaged the Applicant for fabrication and attachment of body. ii. The Applicant, on its own account, procures raw materials in order to fabricate a body as per the specifications and requirements of Tata Motors. iii. The Applicant prepares the body by fabricating the steel sheets and other components and undertakes the required finishing operations on the body. iv. Tata Motors provides the chassis on FOC basis under a returnable delivery challan to the Applicant for the attachment of body. Tata Motors continues to be the owner of the chassis and there is no permanent transfer of chassis by Tata Motors to the Applicant. v. The Applicant performs the body building operations by fabricating and thereafter attaching the body on the chassis provided by Tata Motors, by using its labour and machinery, to make a complete and finished vehicle. vi. The finished vehicle is returned back to Tata Motors after completion of the body building operations. A.4 From the above, it is clear that the Applicant is performing the body building operations referred above on the chassis belongs to Tata Motors. Fabricating and attaching of tipper body is a ....
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....e the Applicant is using its own goods which are getting consumed in the processing carried out on the goods of Tata Motors would not change the characteristic of the present activity of being a 'job work'. In this regard, the Applicant places reliance upon the clarification issued by the CBIC vide Circular No. 38/12/2018-GST dated 26.03.2018 'job work', wherein the following was clarified: "5. Scope / ambit of job work: Doubts have been raised on the scope of job work and whether any inputs, other than the goods provided by the principal, can be used by the job worker for providing the services of job 3 work. 'It may be noted that the definition of job work, as contained in clause (68) of section 2 of the CGST Act, entails that the job work is a treatment or process undertaken by a person on goods belonging to another registered person. Thus, the job worker is expected to work on the goods sent by the principal and whether the activity is covered within the scope of job work or not would have to be determined on the basis of facts and circumstances of each case. Further, it is clarified that the job worker, in addition to the goods received from the principal, ca....
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....the above said Circular is squarely applicable to the facts of the present case. Therefore, in view of the above said clarification, the body building operations undertaken by the Applicant would amount to provision of job work services. Further, the Hon'ble Authority of Advance Ruling, Rajasthan has followed the above said Circular in the case of In Re: M/s. Jeet & Jeet Glass and Chemicals Pvt. Ltd. [2021 (48) G. S. T. L. 85 (A. A. R. - GST - Raj.)]. The Hon'ble Advance Ruling Authority, Rajasthan while dealing with the issue of activity of bullet proof body building held as under: "The activity carried out by the applicant by making bullet proof body building (in addition to fixing bullet proof windshield glass, bullet proofing of engine and fuel tank) on the motor vehicles (2.5 Ton capacity) of Chapter heading 87 of the Customs Tariff Act, 1975, supplied by the customer (i.e. free supply) having Tarpaulin cover in the cargo compartment, is a supply of Service attracting GST 18% (SGST 9% + CGST 9%)." (emphasis supplied) A.14 The Applicant further submits that the GST Council examined this issue in detail and decided that the job work services in relation to B....
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....975 Uttar Pradesh Adithya Automotive Applications Pvt. Ltd. 2022 (1) TMI 151 Goa Automobile Corporation of Goa Limited, 2018 TMI 1044 A.16 In view of the above, the Applicant submits that the legal position is fairly settled in the case of body building operation that such an activity would amount to provision of job work services and accordingly, the Applicant being a job worker shall be liable to pay GST @18%. B. THE ACTIVITY UNDERTAKEN BY THE APPLICANT WOULD QUALIFY AS 'SUPPLY OF SERVICE' UNDER SECTION 7 (1A) READ WITH PARA 3 OF SCHEDULE-II OF THE CGST ACT B.1 As explained above, the activities undertaken by the Applicant will amount to provision of job work services. Accordingly, the transaction tantamount to supply of service. Consequently, it shall be classifiable under Chapter Heading 9988 of the Central Tax (Rate) Notification (as amended). B.2 The Applicant submits that the term 'services' is defined under Section 2 (102) of the CGST Act as anything other than goods. Hence, the definition and scope of 'services' is very wide to include any activity or work performed by any person. B.3 The Applicant also submits that as per S....
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.... services in this Heading is based on the service fee paid, not the value of the goods manufactured. 99888 Transport equipment manufacturing services 998881 Motor vehicle and trailer manufacturing services This service code includes motor vehicle manufacturing services, trailers and semi-trailer manufacturing services and motor vehicle parts and accessories manufacturing services." B.6 The above Explanation clarifies that any service which is used in the course of manufacturing of motor vehicles can be classified under the tariff heading 9988. Hence the above Explanation also supports the case of the Applicant that process of fabrication and attaching of tipper body on the chassis of Tata Motors which is used for the manufacture of a fully built vehicle would be treated as a job work service. B.7 In view of the above submissions, the activity performed by the Applicant shall be treated as supply of services and more specifically it will amount to job work services. C. THE ACTIVITIES UNDERTAKEN BY THE APPLICANT SHALL BE CLASSIFIABLE UNDER TARIFF HEADING 998881 AND SHALL CONSEQUENTLY ATTRACT GST @18% ON THE SUPPLY C.1 As explained above, it is a....
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....mments on the above questions are as follows :- 1) In view the above of facts and circumstances, whether the activity undertaken by the Applicant would qualify as "job work" as per the provision of Section 2 (68) of the CGST Act? • As per Section 2 (68) of CGST Act, 2017 "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. • 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. In the instant case, the applicant is using its own goods alongwith bus body fabrication services, hence it is a composite supply which includes supply of goods alongwith the job work services. 2) In view of the above facts and circumstances, whether the activity undertaken by the Applicant would qualify as 'supply of service' under Section 7(1A) read with Para 3 of Schedule-II to the CGST Act? • They undertake supply of service of job work by way of building the body over chassis provided by customers and the activity undertaken by them qualifies as a job wor....
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....nd charges 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." The instant case appears to fall under the situation spelt in Para 12.2(a) of the circular cited Supra as goods (which are not consumable) also used for bus body fabrication alongwith the service and therefore 28% GST will be chargeable accordingly. F. PERSONAL HEARING : In the matter, personal hearing was granted to the applicant on 13.01.2025 & 19.02.2025. Mr.Sandeep Sachdeva, Advocate and Mr. Jaikishan Gyanchandani authorized representative of the applicant appeared for personal hearing. They reiterated the submission already made by them and submitted additional Submission as stated. G. DISCUSSIONS AND FINDINGS: 1. In the present c....
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....e Applicant and the applicable rate of GST on the said supply? 5. Observations and findings by Member (Central Tax) 5.1 Before proceeding further, I found it is pertinent to discuss 'job work' process, which is defined in Section 2 (68) of the CGST Act, as below: 1 "Section 2 (68) "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." 5.2 Further, the CBIC vide Circular No. 38/12/2018-GST dated 26.03.2018 clarified scope/ambit of job work, as per below: "5. Scope / ambit of job work: Doubts have been raised on the scope of job work and whether any inputs, other than the goods provided by the principal, can be used by the job worker for providing the services of job 3 work. It may be noted that the definition of job work, as contained in * clause (68) of section 2 of the CGST Act, entails that the job work is a treatment or process undertaken by a person on goods belonging to another registered person. Thus, the job worker is expected to work on the goods sent by the principal and whether the activity is covered within the sco....
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....ing 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 such service. Thus, fabrication of buses may involve the following two situations : (a) Bus body builder builds a bus, working on the chassis owned by him and supplies the built-up bus to the customer, and charges the customer for the value of the bus. (b) Bus body builder builds body on chassis provided by the principal for body building, and charges 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 me....
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....ry, the term "bus body building" shall include building of body on chassis of any vehicle falling under chapter 87 in the First Schedule to the Customs Tariff Act, 1975. 9 5.10 In view of the above, building a body on chassis of a truck also covered under Bus Body Building and thus I find that the services of fabrication of body on chassis provided by their Customer is rightly covered under Heading 9988 [Manufacturing services on physical inputs (goods) owned by others], which attracts tax rate of 18%. 6. Observations and findings by Member (State Tax) 6.1 Now, before the above questions are to be decided in the instant case, it is pertinent to know whether the activity of the bus body builder, in which fabrication/mounting of bus body on the chassis supplied by the applicant amounts to supply of goods or supply of services. In this regard, CBIC vide Circular No. 34/8/2018-GST, dated 1-3-2018, has clarified the matter. Therelevant portion of the circular is as under: S.No. Issue Clarification 1. Whether activity of bus body building, is supply of goods or services? In the case of bus body building there is supply of goods and services. Thus, ....
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....determined on the basis of facts and circumstances of the present case. 6.4 Further, the tax liability on composite supply has been determined under Section 8 of the CGST/SGST Act, 2017, as under: The tax liability on a composite or a mixed supply shall be determined in the following manner, namely :- (a) 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; and (b) a mixed supply comprising two or, ore supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. It means, in the present case, there is composite supply of goods and services. One of which is a principal supply. And the tax liability of such principal supply will be the tax liability of the composite supply. 6.5 Now, in the present case, I find that chassis is provided by Customer to the applicant on Free of Cost [FOC] basis and at all times, the ownership remains with Customer. The scope of the processing to be undertaken by the applicant is to fabricate and attach the tipper body to the chassis. The applicant develops/fabricate body' and attached the....
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.... for the value of the bus. (b) Bus body builder builds body on chassis provided by the principal for body building, and charges 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 be classification as service, and 18% GST as applicable will be charged accordingly. It will also be pertinent to have look on the FAQ published by the CBIC. The answer to Question No. 27 in the FAQs published by CBIC in the 3rd edition dated 15.12.2018 reads as under :- Q 27. Whether activity of bus body building, is a supply of goods or services? Ans. The classification would depend on which supply is the principal supply. In case, a bus body building company builds on the chassis owned by it and sells the completely built buses, it would be supply of goods. On the other hand, if the ....