Construction, manufacturing and assembly activity if the chassis is owned by the client, a Service: AAR
He Punjab Advance Decision Authority (AAR Punjab) in the matter of M/s RAJ AGRO AIDS has ruled out that the Activity of construction and manufacture of the Tipper Box and the assembly of the same and the collection of manufacturing expenses, if the chassis is property of the Customer Service is provision of services.
The applicant is engaged in the construction and manufacture of tipper bodies and their assembly on the chassis supplied by customers. Customers buy chassis and deliver to the applicant’s factory for the manufacture of the Tipper Box and the assembly of the same on said chassis. Upon receipt of the chassis, a work order is generated specifying the dump truck, and upon customer acceptance, all types of input materials used for structural fabrication, eg, dump kit, angle iron and steel, channel, plate, sheets Aluminum sheets, plywood, lumber, glass nuts, bolts, paints and misc. Applicant purchases other spare parts and shops and hardware etc., at his own expense and using these, Applicant builds and fabricates the body of the dumper and mounts it on the customer-supplied chassis.
At no time does the customer transfer ownership of the chassis to the applicant, rather the ownership of the chassis always remains with the customer. Therefore, the applicant requested the early decision according to the questions raised above about said activity of construction and manufacture of tipper bodies and their assembly on the chassis owned and supplied by the client.
The questions and the sentence are as follows:
This application has been filed under Section 97 of the Central Goods and Services Tax 2017 and the Punjab Goods and Services Tax Act 2017. [hereinafter referred to as “the CGST Act and PGST Act”) by M/s Raj Agro Aids, GSTIN: 03AFIPS6804F1ZJ, Lalheri Road, Khanna-141401, the applicant, seeking Advance an advance Ruling in respect of the following questions.
a) Whether the activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned and supplied by the customer will result in supply of goods or supply of services?
b) If it is supply of goods, what is applicable rate of GST?
c) If it is supply of services, what i’s the applicable rate of GST?
RULING
a) The activity of building and fabricating of Tipper Body and mounting the same by the applicant and collecting fabrication charges including inputs required for such fabrication work, if the chassis is owned and supplied by the customer, will result in supply of services under SAC 9988 and shall be attracting a GST @18%
b) The activity of building and fabricating of Tipper Body and mounting the same by the applicant on the chassis owned by the applicant and using it own inputs & capital goods shall amount to supply of goods and shall be classified under HSN 8707, attracting GST @28%.
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