Building And Fabricating Tipper Body If Chassis Is Owned, Supplied By The Customer Attracts 18% GST: Punjab AAR

The Punjab Authority of Advance Ruling (AAR) has held that the building and fabricating of a tipper body if the chassis is owned and supplied by the customer attract 18% GST.

The two-member bench of Varinder Kaur and Viraj Shayamkarn Tidke has observed that 28% GST is payable on the activity of building and fabricating a Tipper Body and mounting the same by the applicant on the chassis owned by the applicant and using its own inputs and capital goods.

The applicant is engaged in Tipper Body Building and Fabrication and mounting the same on the Chassis supplied by the customers. The customers purchase chassis and hand them over to the applicant’s factory shed for fabricating the Tipper Body and mounting it on the said chassis. On receipt of the chassis, a work order with the specifications of the Tipper Body is raised, and upon acceptance by the customer, all kinds of input materials used for structural fabrication are purchased by the applicant at its own cost and using them, the applicant builds and fabricates the Tipper Body and mounts it on the chassis supplied by the customer.

At no point in time is the ownership of the chassis transferred from the customer to the applicant; rather, the ownership of the chassis always remains with the customer.

The applicant sought an advance ruling in respect of the GST rate applicable to the activity of building and fabricating a Tipper body and mounting it on the chassis owned and supplied by the customer.

The AAR observed that if the activity of fabrication and mounting of bodies is done on the chassis owned by the applicant using his own inputs and capital goods, the same shall amount to the supply of goods.

The Authority noted that the activity of building and fabricating a 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 the supply of services.

Applicant’s Name: Raj Agro AIDS

Date: 03.02.2023

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