Printed educational books treated as goods, not printing services, where ownership remained with the supplier and composite supply applied.

Printed educational books prepared, printed, published, transported and distributed by the applicant on instructions of the education department were classified as a supply of goods rather than a printing service, because the applicant retained ownership of the books and booked the value as sale of books. Applying composite supply principles, the principal supply was held to be printed books. The books were treated as covered by the relevant printed-books entry in the notification and therefore as zero-rated.

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Issues: Whether the supply of specified printed educational books by the applicant, made on the instructions of the School Education Department and allied agencies after printing the syllabus decided by the SCERT, is to be treated as supply of goods or supply of services, and whether it qualifies as printed books attracting zero rate under the relevant notification.

Analysis: The Authority found that the applicant undertook a continuing activity of preparing, printing, publishing, transporting and distributing educational books, but the printed books remained its property and the sale value was booked as sale of books. It held that the transaction was not a mere printing service where the paper or physical inputs belonged to the printer. Applying the concept of composite supply, the Authority concluded that the principal supply in the present facts was the supply of goods, namely printed educational books. It further held that such books fell within the entry for printed books under the applicable notification and were liable to zero rate.

Conclusion: The supply was held to be supply of printed books, not a taxable printing service, and was treated as zero-rated under the notification.

Ratio Decidendi: Where the applicant retains ownership of the printed educational books and the transaction is principally the supply of printed books, the supply is to be classified by the principal supply as goods and not as a printing service.

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