2020 (4) TMI 873 - AAR - GST

Tax exemption for selling religious books to Madrasas clarified under GST laws.

In Re: M/s. Ideal Industrial Synergy Solutions Private Limited

The case addressed the taxability of selling religious books under GST laws. The Authority ruled that the supply of printed religious books to Madrasas is ... Levy of GST - selling of religious books - Classification of goods - rate of GST - Exempt goods or not - HELD THAT:- The supply is made by the applicant to the Madarasas for a consideration and the contract is for the supply of books for consideration. This being in the course of business would amount to a supply of books as per sub-section (1) of section 7 of the Central Goods and Services Tax Act, 2017. There is no direct link between the recipient of books and the supplier of the content and the final product is supplied to the recipient of books and the content provider has no role to play in the selection of the recipient or the sale. Hence it is sale simpliciter of books. HSN Code - rate of tax - HELD THAT:- The printed books are covered under the HSN Code 4901 10 10 and are covered under entry no. 119 of Notification No.2/2017- Central Tax (Rate)dated 28.06.2017 and hence are exempt from tax under the CGST Act, 2017. Further they are covered under entry no. 119 of Notification (02/2017) No. FD 48 CSL 2017 dated 29.06.2017 and hence exempted from the Karnataka Goods and Services Tax Act, 2017 - The inter-State supply of printed books are exempt under the IGST Act, 2017 as they are covered under entry no. 119 of Notification No.2/2017 -Integrated Tax (Rate) dated 28.06.2017. Issues:- Whether selling of religious books attracts GSTRs.- If taxable, what would be the rate of GST and HSN CodeRs.- If exempted, the category of exempted goods and HSN CodeRs.Analysis:1. Issue 1: Taxability of Selling Religious BooksThe applicant sought an advance ruling on whether selling religious books attracts GST. The applicant, engaged in printing and selling religious books for Islamic educational institutions, clarified that they supply books to Madarasas based on orders received, with content provided by religious heads. The Authority found that the supply of books to Madarasas for consideration constitutes a business supply under section 7(1) of the CGST Act, 2017. The final product is directly supplied to the recipient without the content provider's involvement in recipient selection or sale, making it a straightforward sale of books.2. Issue 2: HSN Code and Tax Rate ApplicabilityRegarding the HSN Code and tax rate for supplying books, the Authority determined that printed books fall under HSN Code 4901 10 10. The printed books were found to be exempt from tax under entry no. 119 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 under the CGST Act, 2017. Similarly, they were exempt under entry no. 119 of Notification (02/2017) No. FD 48 CSL 2017 dated 29.06.2017 under the Karnataka Goods and Services Tax Act, 2017. Additionally, inter-State supply of printed books was exempt under the IGST Act, 2017, as per entry no. 119 of Notification No.2/2017-Integrated Tax (Rate) dated 28.06.2017.3. ConclusionThe ruling stated that the supply of printed books by the applicant to religious schools is exempt from tax under various entries of different tax Acts. The exemption applies to the supply of printed books under CGST Act, KGST Act, and IGST Act, as specified in the respective notifications. The ruling provides clarity on the tax treatment of selling religious books and the applicable exemptions based on the HSN Code and relevant notifications.