2018 (10) TMI 1044 – AUTHORITY FOR ADVANCE RULING, GOA – 2018 (18) G. S. T. L. 359 (A. A. R. – GST) – Classification of supply – supply of goods or not? – job-work or not? – As per the application it is mentioned that, the chassis ownership is not transferred and hence it should be classified under job work.
–
Whether the activity of building and mounting of the body on the chassis by the Applicant will result in supply of goods under HSN 8707 or supply of services under HSN 9988?
–
Held that:- GST law does not distinguish between raw material, finished goods and semi-finished goods. It talks about input and Capital goods. Even, semi-finished goods or intermediates are goods and in turn ‘Input’ by the principal or the job worker – the argument of the applicant that they use their own material, hence, they should not be treated as job worker is not tenable under the provision of law.
–
Bus body builder builds body on chassis provided by the principal for body building, and
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
referred to as the SGST Act and CGST Act) by Automobile Corporation of Goa Limited, seeking an Advance Ruling in respect of the following question: Whether the activity of building and mounting of the body on the chassis by the Applicant will result in supply of goods under HSN 8707 or supply of services under HSN 9988. THE FACT OF CASE: – The Applicant M/s. ACGL is receiving chassis of the bus from OEMs on FOC Basis under the cover of delivery challan. They procure various inputs and services directly which are used for carrying out the body building on the chassis received. Once the Bus body is built and mounted on the chassis by the Applicant, the fully built vehicles is sent back to the OEMs/customers on payment of GST as per law which they consider@28%. The GST is paid on the material and activity carried out by the applicant (cost of the chassis is not included). The consideration received by the Applicant is towards the manufacturing of the bus bodies using its own procured mat
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ding body. The question arises for consideration is 1. Is the chassis complete without a body? -If the answer is affirmative then anything added more by anyone is the sale of goods. 2. If answer is negative, -It is a semi-finished goods then any treatment done by any other party on the chassis is the activity of the job work. Hence, it should be classified as supply of service under HSN 9988 which attracts 18% GST However, if we take the contention of the applicant to classify such treatments as supply of goods. It is relevant to consider the procedure followed by the applicant to receive the chassis which is owned by the other party to be worked upon since the cost of chassis is not considered in challan as per the contention of the applicant. As per the application it is mentioned that, the chassis ownership is not transferred and hence it should be classified under job work. As per the provision job work the job worker can use his own goods for providing the services of job worker i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
nput by the principal or the job worker. So, the argument of the applicant that they use their own material, hence, they should not be treated as job worker is not tenable under the provision of law. Moreover, it is clarified that, the 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). It is clarified that in case as mentioned at Para (a) above, the supply made is that of bus, and accordingly supply would attract GST @ 28%. In the case as mentioned at Para (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%
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =