Order Date – 30 November 2022

Key Pointers –

• The Applicant, M/s Royal Coach Builders, is engaged in rendering services of constructing bus body over the chassis supplied by the customers according to their requirements. 
• The issue involved here is whether the activity of Bus Body Building on the chassis supplied by the customer on job work basis is a supply of service or supply of goods and what is applicable SAC/HSN?
• The AAR held that in the case of M/s. Anamallais Engineering (P) Ltd, decided by AAR Tamil Nadu, vide Order dated 30.07.2021, it was held that the activity of Bus body building undertaken on the chassis supplied by the customers amounts to supply of service as per Schedule II clause 3 of CGST Act 2017. The service rendered was classified under SAC 998881 and the applicable rate will be CGST @ 9% and SGST @ 9% as per entry no.26 of Notification No.11/2017-Central Tax (Rate) dt.28.06.2017(as amended).
• Further, Ministry of Finance has issued clarification in Circular No.52/26/2018, dated 09.08.2018, regarding applicability of GST on various goods and services. The instant case falls in the situation spelt in Para 12.2 (b) of the Circular, and therefore Bus body building on the chassis supplied by the customer is a service under SAC 998881 - Motor Vehicle and trailer manufacturing services and 18% GST as applicable will be charged accordingly.