2019 (11) TMI 225 - AAR - GST

PUC textbooks to resellers exempt from GST, job work printing rates vary from 5% to 18% total

AAR Karnataka ruled on GST classification and rates for printing activities. PUC textbooks printed and supplied to resellers are exempt from CGST and SGST ... Classification of goods/services - printed text books for PUC Board classifiable under HSN Code 4901 1010 - whether exempt from the payment of CGST and SGST? - HELD THAT:- The applicant printed the PUC text books and supplied to the various resellers in the state. This activity of printing and supply of the text books to the resellers by the applicant is covered under Notification 2/2017-Central Tax (Rate) dated 28/06/2017 under entry No. 119 reads as “Printed Books, including Braille Books.” This is exempt from the payment of CGST and SGST. Applicable rate of CGST and SGST - printing and binding of brochures, books, calendars, pamphlets on job work basis to the Government authority and other printers - CBEC Circular no. 11/11/2017- GST dated 20.10.2017 - HELD THAT:- The Applicant undertakes printing and binding of brochures, books, calendars, pamphlets, on a job work basis where content and paper belongs to the customer and only ink and machines belongs to the printer. The nature of supply is supply of services as supply of service is the main supply. Printed books, brochures, leaflets and similar printed matter, whether or not in single sheets are classifiable under HSN 4901 - The aforesaid activities of the applicant are, therefore, covered under the entry No. 26 and 27 of Notification 11/2017-Central Tax (Rate) date 28.06.2017 under the clause (i) of sub clause (da) which attracts 2.5% CGST + 2.5% SGST in respect of job work of printing and binding of books, brochures and leaflets and 6%CGST +6% SGST in respect of calendars. Applicable rate of CGST and SGST - binding of diary, catalogues and books on job work basis - HELD THAT:- Applicant done the job work of binding of Diary, Catalogues and Books, not in relation to printing activity. The activity amounts to supply of service and printing or any work in relation to printing is not involved. Hence this job work is covered under clause (iv) of entry no. 26 of Notification 11 /2017-Central Tax(Rate) inserted vide notification no. 1/2018 Central Tax (rate) Dated 25/01/2018 - the activity of binding of diary, catalogues and books carried out by the applicant on job work basis attracts CGST @9% and SGST @9%. Applicable rate of CGST and SGST - printing and supply of text books and work books to the State Government for onward supply to schools - HELD THAT:- Once the Text books and Work books are printed by the Applicant, the books are thereafter supplied/ delivered to Taluk offices of the State Government across the state for onward supply to schools. As the content is supplied by the recipient of supply the activity carried out by the applicant amounts to supply of service - This activity of the applicant, is therefore, covered under the clause (i) of the entry no. 27 of the Notification 11/2017-Central Tax (Rate) dated. 28.06.2017 inserted vide notification No. 31/2017 Central Tax (Rate) dated. 31/10/2017 and vide notification No. 20/2017 Central Tax (Rate) dated. 22/08/2017 which attracts CGST@ 6% and SGST @ 6%. Exemption form GST or not - printing and supply of periodicals and magazines referred in HSN code 4901 - HELD THAT:- The Applicant prints the magazines on the basis of the design template stipulated by the respective department(s) and supplied to the Government Departments. The materials used for designing is provided by the Applicant. This activity of the applicant covered under the clause (i) of the entry no 27 of the Notification 11/2017-Central Tax (Rate) dated. 28.06.2017 inserted vide notification No. 31/2017 Central Tax (Rate) dated. 31/10/2017 and vide notification No. 20/2017 Central Tax (Rate) dated. 22/08/2017 which attracts CGST @ 6% and SGST @ 6%. Issues Involved:1. Exemption of printed textbooks for PUC Board from CGST and SGST.2. Applicable rate of CGST and SGST on printing and binding of brochures, books, calendars, pamphlets on a job work basis.3. Applicable rate of CGST and SGST on binding of diary, catalogues, and books on a job work basis.4. Applicable rate of CGST and SGST on printing and supply of textbooks and workbooks to the State Government.5. Exemption of printing and supply of periodicals and magazines from GST.Issue-wise Detailed Analysis:1. Exemption of Printed Textbooks for PUC Board:The applicant, engaged in printing and supplying textbooks for the PUC Board, contended that this activity falls under Notification 2/2017-Central Tax (Rate) under entry No. 119, which exempts 'Printed Books, including Braille Books' from CGST and SGST. The Authority confirmed that the printed textbooks supplied to resellers are indeed covered under this exemption.2. Applicable Rate on Printing and Binding of Brochures, Books, Calendars, Pamphlets:The applicant undertakes printing and binding on a job work basis where the content and paper are supplied by the recipient. The ink, plates, machines, and manpower belong to the applicant. According to Notification 11/2017-Central Tax (Rate) and Circular no. 11/11/2017-GST, such activities are considered supply of services. The printed materials, excluding calendars, fall under HSN 4901 and attract 2.5% CGST and 2.5% SGST. Calendars fall under HSN 4910 and attract 6% CGST and 6% SGST.3. Applicable Rate on Binding of Diary, Catalogues, and Books:The applicant performs binding on a job work basis with materials provided by customers, including government departments. This activity does not involve printing and is classified under clause (iv) of entry no. 26 of Notification 11/2017-Central Tax (Rate), attracting 9% CGST and 9% SGST.4. Applicable Rate on Printing and Supply of Textbooks and Workbooks to State Government:The applicant prints textbooks and workbooks using content supplied by the Government School Board/PUC Board, with all physical inputs belonging to the applicant. This activity is considered a supply of service under clause (i) of entry no. 27 of Notification 11/2017-Central Tax (Rate), attracting 6% CGST and 6% SGST.5. Exemption of Printing and Supply of Periodicals and Magazines:The applicant prints monthly and bi-monthly magazines for government departments, with content supplied periodically and no advertisements included. This activity falls under clause (i) of entry no. 27 of Notification 11/2017-Central Tax (Rate) and attracts 6% CGST and 6% SGST.Ruling:1. Printed textbooks classifiable under HSN Code 4901 supplied to resellers are exempt from CGST and SGST.2. Printing and binding of brochures, books, and pamphlets on a job work basis attract 2.5% CGST and 2.5% SGST, while calendars attract 6% CGST and 6% SGST.3. Binding of diaries, catalogues, and books on a job work basis attracts 9% CGST and 9% SGST.4. Printing and supply of textbooks and workbooks to the State Government attract 6% CGST and 6% SGST.5. Printing and supply of periodicals and magazines to government departments attract 6% CGST and 6% SGST.