2018 (8) TMI 284 – AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH – 2018 (16) G. S. T. L. 157 (A. A. R. – GST) – Classification of Supply – activity of Body Building on the chasis supplied by the Principal, which is undertaken as a job work – utilising and consuming tangible material from their (Applicant’s) end for fulfilling the job work.
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Whether the supply is to classified as supply of goods or supply of services? – Held that:- In the case of bus body building there is supply of goods and services. 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 – the activity of Body Building undertaken by the Applicant, carried out on the chassis supplied by the principal in the capacity of a job worker, would amount to ‘Composite Supply’ as define under CGST Act 2017/MPGST Act 2017.
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What would be the appropriate classification and applica
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ilding undertaken by the Applicant, carried out on the chasis supplied by the principal in the capacity of a job worker, would amount to ‘Composite Supply’ as define under CGST Act 2017/MPGST Act 2017.
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The rate of tax on such Composite Supply would be determined by the predominant component involved in such Composite Supply in terms of Section 8(a) of the CGST Act 2017, depending upon the character of the body being built on the chasis, which would eventually be classifiable under Chapter 87 of the Tariff. On the other hand, if the predominant element happens to be the Service part, then the Principal supply would be classified under Heading no.9988.
– Final Order No. 04/2018 Dated:- 30-6-2018 – Shri Rajeev Agrawal, Joint Commissioner, And Commissioner CGST And Central Excies And Shri Manoj Kumar Choubey, Joint Commissioner of State Tax, Commircial Tax Division For The Applicant : Krishan Garg, Praveen Gupta And K. Soni RULING 1. At the outset we would like to make it clear th
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transaction is covered under Service category. 2.3 Thus the Applicant have approached the Authority for limited and specific ruling about classification of their activity of Body Building on the chasis supplied by the Principal, which is undertaken as a job work, though utilising and consuming tangible material from their (Applicant s) end for fulfilling the job work 3. QUESTIONS RAISED BEFORE THE AUTHORITY: The following questions have been posed before the Authority, with reference to the activity undertaken by the Applicant: 3.1 Whether the supply mode by us is to classified as supply of goods or supply of services?; 3.2 What would be the appropriate classification and applicable rate of tax for the above transaction? 4. DEAPRTMENT S VIEWPOINT: Central/MPGST Act, 2017 section 2 read with section 8-in the case of bus body building there is supply of goods and services. Thus, classification of the composite supply as goods or service would depend on which supply is the principle suppl
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but is fabricated on chasis itself Body requirement (mainly interior) differ from party to party. 5.3 It was further submitted that thus it can be seen from above that fabrication and other work is done on chasis itself. It is not the case that any ready made body is fitted on chasis given by the owner . It is important to note during this whole process, ownership of chasis always remains with the person who has given us job work for making body on chasis. Thus it is not the case of only supply of goods . We, therefore of the view that supply made by us is a composite supply of goods and services, however, since the predominant intention of the buyer here is to get services, hence it should be classified as services and should be charged GST @18% 6. DISCUSSIONS AND FINDINGS: 6.1 We have carefully considered the submissions made by the applicant \n the application. We find that the activity and the question raised before us has been suitably clarified and dealt with in Circular No.34/08
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o 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. 6.3 Further, as regards tax liability on composite supply, Section 8(a) of the CGST Act 2017 provides that a composite supply comprising of two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; The term Principal Supply has been categorically defined under Section 2(90) of the CGST Act 2017 and corresponding entry in MPGST Act, 2017; 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. 6.4 Though the Applicant, in their additional submission dtd.23.06.2018 have briefly described the process being undertaken by them during the co
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ne the rate of tax applicable on such composite supply. In case the Goods part is predominant, then the Composite Supply in this case would be governed by Chapter 87 depending upon the nature of body being built by the Applicant on the chasis supplied by the principal. In case, the Service part is predominant in the composite supply, then the rate of tax would be applicable as per Heading No.9988. However, due to incomplete information provided by the Applicant, the Authority finds itself constrained to provide any definitive ruling on this aspect. RULING 7. The Advance Ruling on questions posed before the authority are answered as under: 7.1 In respect of Question 1, we hold that the activity of Body Building undertaken by the Applicant, carried out on the chasis supplied by the principal in the capacity of a job worker, would amount to Composite Supply as define under CGST Act 2017/MPGST Act 2017; 7.2 In respect of Question No.2, we hold that the rate of tax on such Composite Supply
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