M/S PARAS MOTOR INDUSTRIES
The Applicant is engaged in the business of fabrication & fitting out bus bodies on the chassis supplied by its customers as per the specifications provided by the customers.
The Applicant sought Advance Ruling on following two issues:
1. Whether the activity of fabrication & fitting and mounting of bus bodies on the chassis supplied by the other party is a job work SAC 9988 or contract of sale of bus body HSN CODE 8707?
2. If it is held to be a job work, what rate of tax is required to be charged and paid ?CBEC vide Circular No. 34/8/2018-GST dt.03.03.2018, has clarified the matter as under:
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S. No. |
Issue |
Clarification |
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1. |
Whether activity of bus body building, is a supply of goods or services? |
In the case of bus body building there is supply of goods and services. Thus, classification of this composite supply, as goods or service would depend on which supply is the principal supply which may be determined on the basis of facts and circumstances of each case. |
The customer is providing only chassis. All inputs/materials required for fabrication of bus body, has to be used by the applicant from its own account. Under this situation it is the bus-body which is being fabricated and also being mounted on the chassis provided by the customer. Therefore, it is not merely job-work. Rather it is supply of bus body and an activity of fitting/mounting of bus body on chassis is an ancillary activity to the principal activity of supply of bus-body. Hence, in terms of the clarification issued by the CBEC vide circular No.34/8/2018 the activity is a composite supply, with principal supply being supply of bus-body.
Crux: 1. The activity of fabrication and fitting and mounting of bus bodies on the chassis supplied by the other party is a composite supply with supply of goods, i.e., bus-bodies, being principal supply (HSN code 8707).
2. As the activity has not been held as supply of service, the second rate of tax on supply of service is not required to be spelt out in this ruling.