Printing of question papers is a composite service, and it qualifies for exemption as an examination-related service.
Printing of question paper books using content supplied by educational institutions was treated as a composite supply of services, because the printer supplied the physical inputs and performed the printing under confidentiality and restricted-use conditions; it was therefore not a supply of goods under HSN 4901 but a service classified under Heading 9989. The same service was held to fall within serial number 66 of Notification No. 12/2017-Central Tax (Rate), because the expression "relating to" is broad enough to include printing of question papers as a service connected with the conduct of examination by an educational institution. The service was accordingly exempt under the specified entry.
Issues: (i) Whether printing of question paper books using content supplied by educational institutions is a supply of goods under HSN 4901 or a composite supply of services; (ii) Whether such service falls within serial number 66 of Notification No. 12/2017-Central Tax (Rate) as services relating to conduct of examination by an educational institution.
Issue (i): Whether printing of question paper books using content supplied by educational institutions is a supply of goods under HSN 4901 or a composite supply of services.
Analysis: The printing activity involved content supplied by the recipient, while the printer used its own physical inputs such as paper and ink. The nature of the contract also involved confidentiality and restricted use of the printed question papers. In such circumstances, the supply was treated as a composite supply, with the principal supply being the service of printing. The activity therefore did not constitute supply of goods and was classifiable as a service under Heading 9989 of the scheme of classification of services.
Conclusion: The activity is not a supply of goods under HSN 4901 and is a composite supply of services.
Issue (ii): Whether such service falls within serial number 66 of Notification No. 12/2017-Central Tax (Rate) as services relating to conduct of examination by an educational institution.
Analysis: Entry 66 covers services provided to an educational institution by way of services relating to admission to, or conduct of examination by, such institution up to higher secondary level. The expression "relating to" was treated as broad and inclusive, and printing of question papers was held to be one of the services connected with conduct of examination. The heading 9992 in the entry was considered only indicative and not controlling of the substantive coverage of the entry. The amended explanation treating Central and State Educational Boards as educational institutions for this limited purpose also supported inclusion.
Conclusion: The service of printing question papers supplied to educational institutions is covered by serial number 66 of Notification No. 12/2017-Central Tax (Rate) and the corresponding KGST notification.
Final Conclusion: The ruling confirms that printing of question papers supplied by educational institutions is a taxable service under the service classification, but its supply to educational institutions for examination purposes is exempt under the specified entry.
Ratio Decidendi: Where the recipient supplies the content and the printer supplies the physical inputs and performs printing under confidentiality constraints, the transaction is a composite supply of services, and services connected with examination, including printing of question papers, fall within the exempt entry for services relating to conduct of examination.
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