Activity of building, fabricating and mounting if chassis is owned by customer, a Service: AAR

The Punjab Authority of Advance Ruling(AAR Punjab) in the matter of M/s RAJ AGRO AIDS has ruled out that Activity of building and fabricating of Tipper Body and mounting the same and collecting fabrication charges, if chassis is owned by customer Service is supply of services.

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 Misc. Other spares & stores and hardware goods etc. are purchased by the applicant at its own cost and using the same the applicant builds and fabricates the Tipper Body and mounts the same on the Chassis supplied by the customer.

At no stage of time the ownership of the chassis is transferred by the customer to the applicant rather the ownership of chassis always remains with the customer. So, the applicant requested for the Advance Ruling as per questions stated above on the said activity of building and fabricating of Tipper body and mounting the same on the chassis owned and supplied by the customer.

The Questions and Ruling are as follows:

The present application has been filed under Section 97 of the Central Goods and Service Tax, 2017 and the Punjab Goods and Service Tax Act, 2017 [hereinafter referred to as “the CGST Act and PGST Act”) by M/s Raj Agro Aids, GSTIN: 03AFIPS6804F1ZJ, Lalheri Road, Khanna-141401, the applicant, seeking Advance an advance Ruling in respect of the following questions.

a) Whether the activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned and supplied by the customer will result in supply of goods or supply of services?

b) If it is supply of goods, what is applicable rate of GST?

c) If it is supply of services, what i’s the applicable rate of GST?

RULING

a) The activity of building and fabricating of Tipper Body and mounting the same by the applicant and collecting fabrication charges including inputs required for such fabrication work, if the chassis is owned and supplied by the customer, will result in supply of services under SAC 9988 and shall be attracting a GST @18%

b) The activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned by the applicant and using it own inputs & capital goods shall amount to supply of goods and shall be classified under HSN 8707, attracting GST @28%.

For Official Ruling Download PDF Given Below: