GST Classification for Bus Body Building on Customer Chassis
The Authority for Advance Ruling decided that building a bus body on a customer's chassis is a service, not a supply of goods.
- Ruling
- Order Number 03/2019 dated 10.04.19
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Rohan Coach Builders asked if bus body building is goods or services.
- The Authority ruled it is a service under SAC 998881.
- The activity is taxable at 18% GST.
In short
The company asked whether building a bus body on a chassis provided by a client counts as selling goods or providing a service. Because the client keeps ownership of the chassis, the authority decided this is a job work service rather than the sale of a complete vehicle.
What has changed
How it worked before
Businesses were often unsure if this activity should be taxed as a supply of goods (the bus) or a supply of services (the fabrication work).
What has changed
The authority confirmed this is a service taxable at 18%. This means businesses must classify their invoices as job work services rather than goods sales, provided they do not own the chassis.
Who this affects
Automotive fabricators and bus body builders who work on chassis supplied by their clients.
An example
A local fabrication shop, 'City Bus Works', builds bodies on chassis sent by a bus manufacturer. They were unsure if they should charge GST as if they were selling a bus. Based on this ruling, they should classify their work as a service and charge 18% GST on the fabrication fee.
What you should do
This ruling only applies to the business that asked for it. If you perform similar work, use this as a guide for how the department views the law, but consult your own tax advisor to confirm your specific tax treatment.
If you do nothing
If you incorrectly classify your work as a supply of goods when it is a service, you may face issues with input tax credit claims or incorrect tax filings. A tax officer could demand the difference in tax or impose penalties for misclassification. Never assume a ruling for another company protects you from an audit.
The terms explained
- Job work
- Any treatment or process undertaken by a person on goods belonging to another registered person.
- SAC
- Services Accounting Code, a system used to classify services for GST purposes.
- Chassis
- The base frame of a vehicle, including the engine and wheels, upon which the body is built.
The ruling in detail
Authority for Advance Ruling
M/s. Rohan Coach Builders
Order Number 03/2019 dated 10.04.19 · Madhya Pradesh
Questions before the authority
- Whether the activity of building and mounting of the body on the chassis provided by the principal will result in supply of goods under HSN 8707 or supply of services under HSN 9988 taxable at 18%.
Facts
The applicant is engaged in the fabrication of bus bodies on chassis supplied by OEMs or other principals. The ownership of the chassis remains with the principal at all times, and the applicant performs the fabrication work using their own inputs and services. The applicant seeks to clarify the taxability of this activity, specifically whether it constitutes a supply of goods or a supply of services.
Ruling
| Question | What the authority ruled |
|---|---|
| Fabrication of bus body on principal's chassis | Supply of services Taxable at 18% under SAC 998881 |
The Authority ruled that the activity of fabricating a bus body on a chassis supplied by the principal constitutes a supply of services. It is classified under SAC 998881 as manufacturing services on physical inputs owned by others. The activity is taxable at 18% GST.
Reasoning
The ruling relies on the definition of job work under Section 2(68) of the CGST Act and the clarification provided in CBIC Circular no. 52/26/2018-GST. The Authority determined that since the ownership of the chassis is not transferred to the applicant, the activity qualifies as job work. Consequently, it falls under the category of manufacturing services on physical inputs owned by others, which is distinct from the supply of a complete bus.
Provisions relied on
- Section 2(68) of the CGST/SGST Act
- Section 97(2) of the CGST/SGST Act
- Section 98 of the CGST/SGST Act
- Section 103(2) of the CGST/SGST Act
- Section 104(1) of the CGST/SGST Act
- Section 143 of the CGST/SGST Act
- Schedule II of the CGST Act
- CBIC Circular no. 52/26/2018-GST
For the practitioner
This ruling confirms that bus body building on a chassis provided by a principal is a **supply of services** taxable at 18% rather than a supply of goods. It provides clarity for job workers in the automotive sector by distinguishing between the supply of a complete vehicle and the provision of fabrication services. Practitioners should note that this classification is strictly contingent on the **non-transfer of ownership** of the chassis.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/mp-03-2019-rc_builders.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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