Classification of service— In the instant case, the applicant is engaged in the business of body building of commercial vehicles used for carrying goods.

The applicant requested an advance ruling on the following:

1. Whether the activity of commercial vehicle's body building on job work basis, on the chassis supplied by the customer, is supply of goods or supply of services?

2. If it is a supply of goods, what is the applicable rate of GST?

3. If it is supply of services, what is the applicable rate of GST?

The applicant submitted that they are carrying on the business of body building of commercial vehicles. In the normal course of trade, the customer purchase the chassis and hand it over to the applicant for fabricating the vehicle body. The applicant on receipt of the chassis, fabricates the body of the vehicle as per the needs of the customer. Therefore, the applicant's activity In respect of which Advance Ruling is sought for is in the nature of works contract.

The applicant is providing services of body building of commercial vehicles used for carrying goods on the chassis supplied by the customers. The body is built as per the requirement of the customers. The main issue to be determined is whether the activity constitutes supply of services or supply of goods.

The applicant is collecting the charges for the activity which includes the cost of inputs / material used by the applicant and the labour charges for fabrication of the body. Thus it is evident that the applicant is fabricating body on the chassis belonging to the customer. The ownership of the chassis remains with the customer and at no stage of the process of fabrication of the body, the title of the chassis is transferred to the applicant. Therefore, 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.

Accordingly, the activity is liable to GST at the rate of 18% [9% CGST + 9% SGST] as per entry at Sl No, 26 (iv) - 9988 - "Manufacturing services on physical inputs (goods) owned by others - Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above" of Notification No, 11/2017 Central Tax (Rate) dated 28.06.2017.

Held that— The activity of tanker body building on the chassis supplied by the customer is a supply of service. 

The activity is liable to GST at the rate of [9% CGST + 9% SGST] as per entry at Sl No. 26 (iv) --- 9988 - "Manufacturing services on physical inputs (goods) owned by others - Manufacturing services on physical inputs (goods) owned by others, other than (i), (ia), (ib), (ic), (id), (ii), (iia) and (iii) above" of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.