GST on Bus Body Building and Retreading of Tyres in India

Goods and Services Tax (GST) is a value-added tax that replaced multiple indirect taxes in India. GST on bus body building, retreading of tyres, and other services related to the automobile industry is an important area of concern for many small and medium business owners and startup founders.

Before understanding the GST on these services, it is essential to understand the concept of GST. GST is a tax levied on the supply of goods and services, which is charged at every stage of the supply chain. The tax is collected by the supplier and deposited with the government. The final consumer bears the burden of the tax.

As per the GST law, bus body building and retreading of tyres are categorized as services. GST is applicable on these services as they fall under the ambit of the GST law. The rate of GST on these services is determined by the type of service and the applicable rate of tax.

Understanding GST on Bus Body Building

Bus body building is the process of constructing a bus body on a chassis. GST is applicable on the services related to bus body building. The rate of GST applicable on bus body building is 18%.

However, if the bus body builder avails input tax credit (ITC) for the taxes paid on the goods and services used for bus body building, then the GST rate may be reduced. ITC is the tax credit that a business can claim on the taxes paid on the inputs used for the production of goods and services.

The GST rate applicable on bus body building may also vary depending on the type of bus being built. For instance, the GST rate applicable on building a tourist bus is 28%.

Understanding GST on Retreading of Tyres

Retreading of tyres is the process of replacing the worn-out tread of a tyre with a new tread. GST is applicable on the services related to retreading of tyres. The rate of GST applicable on retreading of tyres is 18%.

However, if the retreader avails input tax credit (ITC) for the taxes paid on the goods and services used for retreading of tyres, then the GST rate may be reduced.

Conclusion

GST on bus body building, retreading of tyres, and other services related to the automobile industry is an important area of concern for many small and medium business owners and startup founders. Understanding the GST rate applicable on these services is essential to ensure compliance with the GST law.