Supply of Bus body building on chassis owned by customer is supply of Service: GAAR

M/s. Vasant Fabricators Pvt. Ltd. (VFPL) submits that it is engaged in building bodies of various vehicles falling under Chapter 87 of the First Schedule to the Customs Tariff Act such as mounting of tankers, tippers, etc., on chassis provided by the owner of such chassis, either registered or unregistered.

The GAAR was asked whether the activity of fabricating and mounting Tankers, Tippers, etc. on the chassis provided by the owner of the such chassis i.e., bus body building would be covered under the category of Supply of Services, and if yes, the applicable rate of GST thereon.

VFPL has submitted that the activity undertaken by them is in the nature of working upon the goods i.e., chassis supplied by the principal and converting the same into a Mounted Tanker, Tipper, etc. Therefore, the activity, as per their understanding, would be in the nature of the supply of services. As per the Scheme of Classification of services in the Annexure to Notification No. 11/2017 Central Tax (Rate) and corresponding SGST/IGST Notifications Schedule II (3) CGST Act reads as, any treatment or process which is applied to another person’s goods is a supply of service.

Therefore, bus body building on customer-owned chassis is the supply of service. Section 2(68) CGST Act defines Job work as any treatment or process undertaken by a person on goods belonging to another registered person.

Therefore, bus body building on chassis owned by GST registered customer is Job work and finds entry at Sr. no. 26 (ic) to Notification 11/2017-CT (R). And bus body building on chassis owned by the un-registered customer is ‘Manufacturing services on physical inputs (goods) owned by others, other than those registered under CGST Act’ which finds entry at Sr no. 26(iv) to Notification 11/2017- CT (R).

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