Chhattisgarh Text Book Corp: Supply of printed books classified as goods under zero tax rate

The ruling authority classified the supply of books by the Chhattisgarh Text Book Corporation as a supply of goods rather than services, considering it a "composite supply" with the principal supply being printed books. The applicable tax rate for these books was determined to be zero under HSN code 4901. The authority confirmed that the supply of specified printed educational books by the corporation falls under this code and is subject to a zero tax rate.

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Issues Involved:
1. Classification of the supply of books by the Chhattisgarh Text Book Corporation as supply of goods or services.
2. Determination of the applicable tax rate for the supply of books by the Chhattisgarh Text Book Corporation.

Issue-wise Detailed Analysis:

1. Classification of the Supply of Books:
The primary issue is whether the supply of books by the Chhattisgarh Text Book Corporation (CGTBC) constitutes a supply of goods or services. The applicant, CGTBC, is a society registered under the Chhattisgarh Society Registration Act, 1973, and undertakes the task of publishing and distributing books as per the instructions of the School Education Department, Chhattisgarh. The books are printed based on the syllabus decided by the State Council of Educational Research and Training (SCERT).

CGTBC argued that its activities, which include purchasing paper, printing content provided by SCERT, and distributing the books, constitute the supply of goods. CGTBC maintains ownership of the books throughout the process, bearing any losses incurred from unsold or damaged books. The books are distributed to various educational agencies, including the School Education Department and Rajiv Gandhi Shiksha Mission.

The ruling authority examined the nature of the supply and concluded that the supply of books by CGTBC is a "composite supply" as defined under Section 2(30) of the GST Act. The principal supply in this case is the supply of printed books. Consequently, the activity of CGTBC is classified as a supply of goods.

2. Determination of the Applicable Tax Rate:
The second issue concerns the applicable tax rate for the supply of books by CGTBC. The applicant sought clarification on whether the books supplied fall under HSN Code 4901, which covers "printed books, including Braille books," and attracts a zero tax rate.

The ruling authority considered the submissions and evidence provided by CGTBC, including the process of printing and distributing books as per the syllabus approved by SCERT. The authority noted that the supply of printed books by CGTBC is a principal supply of goods. Therefore, the supply of these books merits consideration under HSN code 4901.

The ruling authority concluded that the supply of specified printed educational books by CGTBC, as per the instructions of the School Education Department and other educational agencies, falls under HSN code 4901 and attracts a zero tax rate under Notification No. 2/2017-State Tax (Rate) No. F-10-43/2017CT/V/70, dated 28-6-2017.

Order:
The ruling authority answered the applicant's queries by confirming that the supply of specified printed educational books by CGTBC, as per the instructions of the School Education Department and other educational agencies, constitutes a supply of goods under HSN code 4901 and attracts a zero tax rate.

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