2022 (9) TMI 369 - AAR - GST

Printing services on customer-owned duplex board qualify as job work services attracting 12% GST rate under Notification 11/2017.

AAR, West Bengal ruled that printing services on customer-owned duplex board, including cutting, punching and lamination, constitute job work services ... Treatment or process on goods as supply of services - job work - services by way of job work in relation to printing - manufacturing services on physical inputs (goods) owned by others - classification under Chapter 48 - applicability of GST rate on job workTreatment or process on goods as supply of services - job work - Whether the applicant's activities (printing, cutting, punching, lamination) on duplex board supplied by the customer are to be treated as supply of services and, if so, whether they constitute job work. - HELD THAT: - Entry No. 3 of Schedule II treats any treatment or process applied to another person's goods as a supply of services. The applicant carries out printing and ancillary processes on duplex board owned by its customers; thus these activities are supplies of services. The statutory definition of 'job work' in clause (68) of section 2 requires that the goods on which the treatment is undertaken belong to a registered person for the activity to qualify as job work. Consequently, where the customer is a registered person the activity qualifies as job work; where the customer is unregistered, the activity remains a treatment or process on another's goods but does not meet the statutory definition of 'job work'. [Paras 4]The activities are supply of services; they qualify as 'job work' only when the goods belong to a registered person, and remain treatment or process on another's goods when the owner is unregistered.Services by way of job work in relation to printing - manufacturing services on physical inputs (goods) owned by others - classification under Chapter 48 - applicability of GST rate on job work - The applicable GST rate on the applicant's services (printing of duplex board including cutting, punching and lamination) and whether the rate differs depending on whether the recipient is registered under the GST Act. - HELD THAT: - Notification No.11/2017-Central Tax (Rate) (entry no.26) prescribes rates for services by way of job work in relation to printing of goods falling under Chapter 48. Duplex board falls within Chapter 48 and is itself taxed at 12% (CGST 6% + SGST 6%) under the tariff entry. Entry no.26 contains sub-items which tax job work services relating to printing of Chapter 48 goods at an aggregate rate of 12% (CGST 6% + State GST 6%). The Authority examined the notification structure and the tariff classification of duplex board and concluded that whether the service is characterised as job work (owner registered) or as treatment/process on goods of an unregistered owner, the relevant sub-items (ia)(b) and (iia) under entry no.26 render the service taxable at 12%. The residual category attracting 18% is inapplicable as the activity is specifically covered by the entry for printing of Chapter 48 goods. [Paras 4]Printing (with ancillary cutting, punching and lamination) on duplex board attracts GST at 12% (CGST 6% + WBGST 6%), irrespective of whether the recipient is registered under the GST Act.Final Conclusion: Supply of services for printing on duplex board belonging to the recipient, including cutting, punching and lamination, is a supply of services and attracts GST at 12% (CGST 6% + WBGST 6%), irrespective of the registration status of the recipient. Issues involved:1. Applicability of GST rate on works contract (job work) involving printing on duplex board.Analysis:1. The applicant, engaged in manufacturing printed materials, sought an advance ruling on the GST rate applicable to their works contract involving printing on duplex board.2. The applicant carries out printing, lamination, cutting, and related activities on duplex board received from customers.3. The question raised falls under clause (a) of sub-section (2) of section 97 of the GST Act and has not been previously decided by any authority.4. The revenue officer raised no objections, leading to the admission of the application.2. Submission of the Applicant:1. The applicant clarified that job work services to registered persons are taxed at 12% and at 18% for unregistered persons.2. The applicant charges tax accordingly based on Circular 126/45/2019-GST.3. Submission of the Revenue:1. The revenue officer did not provide any specific view on the issue raised by the applicant.4. Observations & Findings of the Authority:1. The Authority examined the applicant's activities and determined them to be services based on Schedule II of the GST Act.2. The definition of 'job work' under clause (68) of section 2 involves treatment or processing on goods belonging to another registered person.3. The applicable tax rate for job work services related to printing is specified in Notification No.11/2017-Central Tax (Rate).4. The Authority concluded that the applicant's activities constitute services by way of job work in relation to printing on duplex board, attracting a tax rate of 12%.5. The ruling stated that regardless of the recipient's GST registration status, the tax rate for such services would be 12%.This detailed analysis provides a comprehensive overview of the legal judgment regarding the applicability of GST rates on works contracts involving printing on duplex board.