Job work—In the instant application, the applicant seeks a ruling on whether the  repair/servicing is job work as defined under section 2(68) of the GST Act, and whether it is composite or mixed supply.

The Applicant is stated to be engaged in repairing and servicing of transformers owned by WBSEDCL. The Applicant, according to the Application and the written submission made at the time of Hearing, transports the defective and damaged transformers from WBSEDCL, dismantles them, and removes the burnt coil and other damaged parts and accessories that require replacement/repair. The repaired transformers are tested and delivered to WBSEDCL. Being the principal insurer, WBSEDCL reimburses the expense on account of transport, fire and burglary insurance.
The Applicant argues that repair/servicing of transformers is job-work as defined under section 2(68) of the GST Act, and should to be treated as supply of service in terms of para 3 of Schedule II to the GST Act.

Held that— Repairing and servicing of defective transformers signify working on something which is already in existence. It involves supply of goods, but not as chattels. The goods, namely the spare parts that have replaced the defective ones, are embedded or fixed to the transformer already in existence so that the defects get removed. The contract is not for the supply of the spare parts, but for the treatment or process for maintenance and removal of the defects from the transformers that belong to WBSEDCL. The predominant element of the supply, therefore, is not transfer of title to the goods, but service in terms of para 3 of Schedule II to the GST Act, and supply of spare parts is ancillary to such supply. The service so supplied is classifiable under SAC 998719, being repair of transformers, and taxable under Sl No. 25(ii) of the Rate Notification, as amended from time to time.

Ruling— Repairing and servicing of transformers owned by another person is not job work as defined under section 2(68) of the GST Act. It is composite supply unless the contract specifies that the goods and services are to be separately charged. The principal supply is the service of repair of transformers classifiable under SAC 998719 and taxable @18%.[Alok Bhanuka, Carrying on Business Under the Trade Name Bhanuka Enterprises] [AUTHORITY FOR ADVANCE RULING, WEST BENGAL][2019] 10 TAXLOK.COM 031 (AAR-WB)