Commercial Vehicle Body Building On Chassis Supplied By The Customer Is A Supply Of Service, Attracts 18% GST: Kerala AAR

The Kerala Authority of Advance Ruling (AAR) has ruled that commercial vehicle body building on chassis supplied by the customer is a supply of service.The two-member bench of S.L. Sreeparvathy and Abraham Renn S. has observed that commercial vehicle body building on chassis supplied by the customer attracts 18% GST.The applicant is in the business of bodybuilding commercial vehicles used for carrying goods. In the normal course of trade, the customers purchase the chassis and hand it over to the applicant for fabricating the vehicle's body. The applicant, on receipt of the chassis, fabricates the body of the vehicle as per the needs of the customer.The applicant has sought an advance ruling on the issue of whether the activity of commercial vehicle bodybuilding on a job-work basis, on the chassis supplied by the customer, is a supply of goods or a supply of services.The applicant has submitted that motor vehicles for the transport of goods (other than refrigerated motor vehicles) fall under heading 8704, chassis fitted with engines fall under heading 8706, bodies, including cabs, for motor vehicles used for the transport of goods fall under heading 8707 and it attracts 28% tax. However, manufacturing services on physical inputs (goods) owned by others fall under SAC 9988 and attract 18% GST.The applicant contended that he is engaged in job work. Section 2(68) defines job work as "any treatment or process undertaken by a person on goods for another registered person and the expression "job worker".The applicant urged that the activity carried on by the applicant is in the nature of a service. Schedule II lists certain activities that are to be treated as a supply of goods or a supply of services. Paragraph 3 of Schedule II deems "treatment or process which is applied to another person's goods" as a supply of service. It is further contended that the applicant's activity is in the nature of treatment or process applied to the chassis provided by a third person and therefore will squarely fall under Paragraph 3 of Schedule II.The AAR held that the applicant is fabricating the body on the chassis belonging to another person and hence the activity is squarely covered under Para 3 of Schedule II of the CGST Act, 2017 as a treatment or process which is applied to another person's goods and, accordingly, is a supply of services.Applicant's Name: Puthusserikudy Thankappan Santosh Dated: 01.08.2022Click Here To Read Ruling

Commercial Vehicle Body Building On Chassis Supplied By The Customer Is A Supply Of Service, Attracts 18% GST: Kerala AAR

Mariya Paliwala

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