According to a recent ruling by the Tamilnadu Authority for Advance Ruling (AAR), bus bodybuilding activities are subject to an 18% Goods and Service Tax.
The proprietrix company Royal Coach Builders, which specializes in producing bus bodies, builds the bodies over the chassis that the client supplies in accordance with their specifications.
On the question of whether the activity of creating a bus body on a customer-supplied chassis constitutes a supply of service or a supply of goods, the applicant has asked for an early decision. What is the GST rate if it is a service supply?
Authorized representative of the applicant M. Saravanan stated before the bench that as they fabricate bus bodies over chassis that are owned and supplied by the clients, the activity qualifies as job work and is thus a provision of services under the Goods and Service Act.
The bus body building activity on the customer-supplied chassis on a job-work basis is a supply of service falling under SAC code 9988 and the GST, and the GST rate is 18%, according to the state commissioner of state jurisdictional authority.
The member of authority N Usha and R Gopalaswamy determined that “activity of bus body building undertaking on the chassis supplied by the customer to the applicable amount to supply of service as per schedule II cause 3 Of CGST Act 2017 and will attract 18% GST” after taking into account the submissions made by the applicant and central and state jurisdictional authorities.
| Name of Applicant | Royal Coach Builders |
| Order No. | 35/AAR/2022 |
| GSTIN No. | 33AAEPV2861Q1Z3 |
| Date | 30.11.2022 |
| Tamil Nadu AAR | Read Order |
