Clarification on gst rate for bus bodies

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 August 2018 Please refer circular 52/26/2018 GST dated 09.08.2018 issued by Government of India, ministry of revenue and point no 12 - applicable GST rate for bus body building activity.

It says if bus body builders purchase chassis and manufacture bus body and sell as Fully built bus , then it is termed as sale of motor buses and GST rate is to be charged 28%

It further says that if chassis is supplied by principal and body builders charges the fabrication charges ( including certain material consumed in the process of job work) , then it is viewed as job work and GST 18% is to be charged.

Our query : If bus body builders purchases all the material required for bus body on their own and claim amount fro m the customer for both material and labour , what is the GST rate to be charged 18% or 28%.

We are asking this question because the term fabrication charges normally only labour charges and the term certain materials may mean consumables used in job work.

Since big confusion is in the industry regarding this, request expert opinion early.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 August 2018 If bus body builders purchases all the material required for bus body on their own and claim amount from the customer for both material and labour , GST rate to be charged is 28%.
Fabrication only welding rod like consumables used hence 18% GST applicable.

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