The Punjab Authority of Advance Ruling (AAR) in the case of M/s Raj Agro Aids in the case of Order No. AAR/GST/PB/32 dated 03.02.2023, has held that the building and fabricating of a tipper body and mounting the same on the chassis owned and supplied by the customers, will result in supply of service attracting 18%. 

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 in its factory shed for fabricating the Tipper Body and mounting the same on the 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. The ownership of the chassis always remains with the customer and not transferred to the applicant at any stage of time.

The applicant stated that they were treating the activity of building and fabrication of tipper body and mounting it on the chassis owned and supplied by the customer with installation services as Supply of Goods and thereby classifying the same under Tariff Item No. 8707 and charging 28% GST.

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, attracting 28% GST.

However, if the activity of building and fabricating a tipper body and mounting the same is done by the applicant on the chassis owned by the customers,  and collecting fabrication charges, including inputs required for such fabrication work, the same will result in supply of services SAC 9988, attracting 18% GST.