Essential character test classifies examination printing as exempt service or taxable goods, depending on whether printing predominates.
Printing contracts for examination material supplied with content provided by the recipient were classified by essential character. Where question papers, admit cards, certificates, overprinting, lamination, marks cards, circulars and ID cards were printed for the Board, printing was the principal supply and the activity was treated as a service relating to conduct of examination, exempt under Entry 66 of Notification No. 12/2017-Central Tax (Rate). By contrast, answer booklets, other examination formats and packing envelopes were held to be goods, because the printed article itself predominated and printing was only ancillary; those supplies were therefore taxable under the relevant tariff entries.
Issues: (i) Whether printing of question papers, admit cards, SSLC pass certificates, variable data overprinting, lamination, fail marks cards, circulars and ID cards on contract for the Karnataka Secondary Education Examination Board constitutes supply of service to an educational institution and is exempt under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate). (ii) Whether printing of answer booklets, other examination formats and envelopes for packing answer booklets on the same contract constitutes supply of goods.
Issue (i): Whether printing of question papers, admit cards, SSLC pass certificates, variable data overprinting, lamination, fail marks cards, circulars and ID cards on contract for the Karnataka Secondary Education Examination Board constitutes supply of service to an educational institution and is exempt under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate).
Analysis: The activity involved printing of content supplied by the recipient, with the physical inputs such as paper being used by the printer. Applying the circular on printing contracts, where the content is supplied by the recipient and printing gives the product its essential character, the principal supply is printing service. The Board was treated as an educational institution for the limited purpose of services by way of conduct of examination, and services relating to conduct of examination fall within Heading 9992 under Entry No. 66.
Conclusion: The activity is a supply of service to an educational institution and is exempt under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate), as amended.
Issue (ii): Whether printing of answer booklets, other examination formats and envelopes for packing answer booklets on the same contract constitutes supply of goods.
Analysis: In these items, the printed product itself gives the supply its essential character, while printing is only ancillary. The materials fall under the relevant tariff headings for paper products and envelopes, and the contract therefore takes the character of supply of goods rather than service.
Conclusion: The activity is a supply of goods and is taxable under the relevant tariff entries.
Final Conclusion: The ruling distinguishes between two categories of printed examination material: one category is treated as exempt printing service to an educational institution, while the other is treated as taxable supply of goods.
Ratio Decidendi: Where printed examination material is supplied with content furnished by the recipient, classification depends on the essential character of the supply: if printing is the principal supply it is a service, but if the printed product itself predominates it is a supply of goods; services relating to conduct of examination supplied to a recognized educational board are exempt under the relevant notification.
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