The Gujarat Bench of the Authority for Advance Rulings (AAR), the activity of fabrication & mounting of Tanker and Tripper on chassis provided and owned by the principal is a supply of Service and must be levied with 18% of GST.
M/s. Hasmukhlal Jivanlal Patel, petitioner would be involved 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 petitioner provides that the activity performed through them was the sort of working on the goods. He claimed that according to the Scheme of Classification of services in the Annexure to Notification No. 11/2017 Central Tax (Rate) and related SGST/ IGST Notifications, their services would come beneath the main head of 9988 which reads as under: “Manufacturing services on physical inputs (goods) owned by others”
The authority, Atul Mehta and Amit Kumar Mishra see that the petitioner procures multiple goods like raw steel and others since inputs for fabricating the bus body on the chassis would get supplied via the principal on the delivery challan.
The petitioner utilizes the specified material for mounting/fabricating the body, after building the body and mounting it on the chassis the vehicle is then again sent to the principal which the petitioner imposes the lump sum fabrication charge along with the cost of material that was consumed in the process of mounting the bus body on the chassis.
The authority ruled the activity of fabrication and mounting of Tanker and Tripper on the chassis supplied and owned via the principal treated as the supply of Service. The tax rate in both cases if the chassis is supplied through the registered person (principal) and un-registered person (principal) shall be 18% as per Entry No. 26 (ic) and 18% under Entry No. 26(iv) respectively. This activity merits classification SAC 998882 ‘Other transport equipment manufacturing services’ according to Annexure attached to Notification No. 11/2017 Central Tax (Rate).
| Case Title | M/s. Hasmukhlal Jivanlal Patel, |
| GSTIN | 24AFUPP9842EIZW |
| Date | 27.04.2022 |
| Counsel For Appellant | Shri Hem Chhajed, CA |
| Calcutta High Court | Read Order |
