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Activity of Body Building undertaken by the Applicant, carried out on the chasis supplied by the principal in the capacity of a job worker, would amount to "Composite Supply" as define under CGST Act. We hold that the rate of tax on such Composite Supply would be determined by the predominant component involved in such Composite Supply.

Shanti Prime Publication Pvt. Ltd.

Classification of supply—The applicant is engaged in building bodies of various vehicles over the chasis provided by their principal on job work basis. During the course of carrying out the process of body building, the Applicant is consuming their own material. The Applicant has contended that as per their understanding they are working as a job worker and accordingly the ensuing transaction is covered under Service category. The question before authority is that 1) Whether the supply mode by them is to classified as supply of goods or supply of services?
2) And What would be the appropriate classification and applicable rate of tax for the above transaction?

Held that—the question raised before authority has been suitably clarified and dealt with in Circular No.34/08/2018-GST dtd.01.03.2018. 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.

Ruling—
In respect of Question 1, we hold that the activity of Body Building undertaken by the Applicant, carried out on the chasis supplied by the principal in the capacity of a job worker, would amount to ‘Composite Supply’ as define under CGST Act 2017/MPGST Act 2017;

In respect of Question No.2, we hold that the rate of tax on such Composite Supply would be determined by the predominant component involved in such Composite Supply in terms of Section 8(a) of the CGST Act 2017, depending upon the character of the body being built on the chasis, which would eventually be classifiable under Chapter 87 of the Tariff. On the other hand, if the predominant element happens to be the Service part, then the Principal supply would be classified under Heading no.9988.[AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH] [2018] 2 TAXLOK.COM 254 (AAR-Madhya Pradesh)

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