• Notification Date: 21-01-2022
• Notification No: N/A

AAAR Rules that 18% GST is Applicable on Body Building, Mounting of Body on Chassis of Tippers, Tankers, Trucks, and Trailers

The Uttar Pradesh Appellate Authority of Advance ruling (AAAR) has announced the new ruling of charging 18% GST on Body Building, Body Mounting on Chassis on the models of Tippers, Tankers, Trucks, and Trailers.

The appellant, M/s Adithya Automotive Applications Pvt. Ltd has been engaged in this matter. The chassis is obtained from the companies like Tata Motors, and other customers. A returnable challan is issued and the chassis is received. Body-building is undertaken as per the contract or the purchase order that is issued by M/s Tata Motors.

The applicant has opted for an advance ruling on this matter and has wanted to know whether 18% GST is applicable on bodybuilding activity on a challan basis.

Aar has given a ruling that there would not be 18% GST applicable for the body-building services provided by the principal based on the challan.

The applicant has challenged the ruling saying that there is no apparent dominant nature of body-building work as compared to chassis. Hence, the cost of the mounted body is required to be 20% less than that of the chassis. Job work can be defined as a treatment or process that is undertaken by an individual on goods that belongs to some other registered person. This is specified under section 2(68) of the GST Act, 2017. A job worker does the job. The ownership of the goods stays with the principal. The job worker conducts the process as said by the principal on the goods. The issue regarding this matter is clarified by the CBIC under Circular No. 38/12/2018 on 26.03.2018. According to the Circular No. 52/26/2018 of GST dated 09.08.2018, 18% GST is applicable on the fabrication work by collecting job work charges. The conditions are stated under Sections 141 and 143 of the CGST Act, 2017 along with relevant Rules or Notifications.