Notification No. 26/2019 - Central Tax (Rate) Explained

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Notification No. 26/2019 - Central Tax (Rate): Seeks to insert explanation regarding Bus Body Building in Notification No. 11/2017-Central Tax (Rate) dt. 28.06.2017.

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R......(E).- In exercise of the powers conferred by sub-section (3) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary so to do, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.11/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number

G.S.R. 690(E), dated the 28thJune, 2017. In the said notification, in the Table, against serial number 26, in column (3), in item (ic), the following Explanation shall be inserted, namely: -

“Explanation- For the purposes of this entry, the term “bus body building” shall include building of body on chassis of any vehicle falling under chapter 87 in the First Schedule to the Customs Tariff Act, 1975.”

(Pramod Kumar)
Director,
Government of India

Note: -The principal notification No. 11/2017 - Central Tax (Rate), dated the 28^th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 690 (E), dated the 28^th June, 2017 and was last amended by notification No. 20/2019-Central Tax (Rate), dated the 30^th September, 2019 vide number G.S.R. 731(E), dated the 30^th September, 2019.

📚 Frequently Asked Questions (FAQs): Notification No. 26/2019 - Central Tax (Rate)

Q1: What is Notification No. 26/2019 – Central Tax (Rate)?

Answer:
Notification No. 26/2019 – Central Tax (Rate) inserts an explanation defining “bus body building” in Notification No. 11/2017 to include body building on chassis of any vehicle under Chapter 87 of the Customs Tariff Act.

Q2: From which date is Notification No. 26/2019 applicable?

Answer:
The notification was issued on 22 November 2019 and is applicable from that date.

Q3: Why was this clarification on bus body building required?

Answer:
There were disputes on whether body building on chassis of non-bus vehicles (like trucks, special purpose vehicles) qualified under the “bus body building” entry. This clarification removes that confusion.

Q4: What does Chapter 87 of the Customs Tariff Act cover?

Answer:
Chapter 87 covers motor vehicles, including:
Buses
Trucks
Lorries
Special purpose motor vehicles
Any body built on chassis falling under this chapter is now clearly covered.

Q5: Does this notification change the GST rate on bus body building?

Answer:
No ❌. It does not change the GST rate. It only clarifies the scope of the existing entry to avoid misinterpretation.

Q6: Who benefits most from Notification No. 26/2019?

Answer:
This notification benefits:
Bus body builders
Commercial vehicle body fabricators
Job work units
Transport and logistics companies
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Q7: Is body building on truck chassis also covered now?

Answer:
Yes ✅. If the truck chassis falls under Chapter 87, body building on such chassis is included under “bus body building” for GST purposes.

Q8: How does this impact GST classification disputes?

Answer:
The notification provides clear statutory backing, making it easier to defend GST positions during:
Audits
Assessments
GST notices

Q9: Is GST registration mandatory for bus body builders?

Answer:
Yes, if turnover crosses the prescribed threshold. Bus body building is a taxable service, and registration is mandatory beyond limits.
👉 Get GST registration easily with Finodha:
🔗 https://finodha.in/online-gst-registration/

Q10: How should bus body building services be shown in GST returns?

Answer:
Such services should be:
Invoiced with correct service classification
Reported in GSTR-1
Tax paid and disclosed in GSTR-3B
👉 File error-free returns with Finodha:
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Q11: Does this clarification apply to job work arrangements?

Answer:
Yes. Where body building is done as job work on customer-owned chassis, this explanation helps determine correct GST treatment.

Q12: Does this affect input tax credit (ITC)?

Answer:
Indirectly, yes. Clear classification ensures:
Correct GST payment
Proper ITC eligibility
Reduced risk of ITC denial during audits

Q13: Can GST officers still dispute classification after this notification?

Answer:
Post-notification, disputes should significantly reduce, as the definition is now expressly provided in the rate notification itself.

Q14: How does this notification link GST with Customs law?

Answer:
By referencing Chapter 87 of the Customs Tariff Act, GST classification is aligned with Customs, ensuring uniform interpretation across tax laws.

Q15: What compliance steps should businesses take after Notification No. 26/2019?

Answer:
Businesses should:
Review existing invoices and contracts
Ensure chassis classification under Chapter 87
Update GST returns and documentation
Seek expert review for past transactions
👉 Get expert assistance from Finodha GST Professionals:
🔗 https://finodha.in/gst-compliance/

Conclusion✅:

Notification No. 26/2019 – Central Tax (Rate) may appear small, but it delivers big clarity for the automobile body building sector by clearly defining what constitutes bus body building under GST.

📌 Key takeaway:
If it’s a body built on a Chapter 87 chassis — it’s covered.

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