GST Exemption for Educational Printing Services and Cheque Printing Clarified by Ruling Authority

The Advance Ruling Authority clarified that printing services of pre-examination and post-examination materials provided to educational institutions are exempt from GST under specific conditions. Additionally, the activity of evaluation of OMR sheets and processing of examination results for educational institutions is also exempt from GST. Regarding the printing of cheques, if the content is supplied by the banker and paper by the applicant, it is taxable at 9% CGST and 9% SGST. However, if the client supplies the paper, it is taxable at 6% under CGST and SGST each. The ruling was issued in the case of M/s. Hitech Print Systems Limited.

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Issues Involved:
1. Tax exemption on pre-examination and post-examination printing services provided to educational institutions.
2. Tax exemption on the activity of evaluation of OMR sheets and processing of examination results.
3. Classification and applicable GST rate for the supply of printed cheque books.

Issue-wise Detailed Analysis:

A. Services Provided to Educational Institutions:
The applicant sought clarification on whether the printing of pre-examination materials (like question papers, OMR sheets, answer booklets, hall tickets) and post-examination materials (like rank cards, marks cards, grade sheets, certificates) provided to educational boards/universities amounts to provision of service and is exempt from GST. The Advance Ruling Authority referred to Circular No. 151/07/2021-GST and Notification No. 12/2017-Central Tax (Rate), which exempts services provided by or to an educational institution relating to admission or conduct of examination. Educational institutions are defined under clause 2(y) of the notification. It was clarified that services related to the conduct of examination, such as printing of examination materials, are exempt under Entry No. 66 of Notification No. 12/2017 if supplied to educational institutions as defined.

B. Printing of Cheques:
The applicant also sought clarification on the classification and applicable GST rate for the supply of cheque books printed as per the specifications given by banks. The authority referred to Notification No. 2 of 2017, which exempts the supply of cheques under HSN code 4907. However, it was clarified that the applicant is providing a printing service where the content is supplied by the banker, and the physical inputs (paper) are provided by the applicant. This scenario falls under Heading 9989 (ii) of Notification No. 11/2017-Central Tax (Rate), making it taxable at 9% CGST and 9% SGST. If the paper is supplied by the client, it falls under Heading 9988 (ii)(a) and is taxable at 6% under CGST and SGST each.

Rulings Issued:

1. Exam-related Printing Activity:
- Pre-examination Materials: Printing of question papers, OMR sheets, answer booklets, hall tickets, and other examination materials specific to educational boards/universities is exempt from GST if supplied to educational institutions as defined in Notification No. 12/2017.
- Post-examination Materials: Printing of rank cards, marks cards, grade sheets, and certificates specific to educational boards/universities is also exempt from GST under the same conditions.
- Evaluation Services: The activity of evaluation of OMR sheets and processing of examination results falls under the category of service and is exempt from GST if provided to educational institutions.

2. Printing of Cheques:
- Content Supplied by Banker: If the banker supplies the content and the applicant uses their own paper, the service falls under Heading 9989 (ii) and is taxable at 9% CGST and 9% SGST.
- Paper Supplied by Client: If the paper is supplied by the client, the service falls under Heading 9988 (ii)(a) and is taxable at 6% under CGST and SGST each.

The application by M/s. Hitech Print Systems Limited was disposed of accordingly.

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