AAAR rules printing services for educational institutions exempt under entry 66 but AAR overstepped jurisdiction on inter-state supplies

The AAAR ruled that intra-state supplies of printing services for examination materials to educational institutions are exempted under entry 66 of Notification No. 12/2017-CGST. However, the AAR exceeded its jurisdiction by ruling on inter-state supplies under CGST notification, which only covers intra-state transactions. Inter-state supplies require separate exemption under entry 69 of Notification No. 9/2017-IGST. The AAR's ruling was deemed legally overextended for addressing notifications beyond its jurisdictional scope.

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Issues Involved:
1. Classification of printing services for pre-examination items.
2. Classification of printing services for post-examination items.
3. Classification of scanning and processing examination results.
4. Applicability of exemptions under Notification No. 12/2017-CGST (Rate) dated 28-6-2017.
5. Jurisdictional applicability of CGST and IGST notifications.

Detailed Analysis:

1. Classification of Printing Services for Pre-examination Items:
The issue concerns whether the printing of pre-examination items like question papers, OMR sheets, and answer booklets for educational boards qualifies as an exempted supply of service under Serial Number 66 of Notification No. 12/2017-CGST (Rate) dated 28-6-2017. The Authority for Advance Ruling (AAR) initially ruled affirmatively, classifying these services as exempt. The Appellate Authority upheld this ruling, confirming that such services fall within the ambit of the specified notification, as they are integral to the conduct of examinations by educational institutions.

2. Classification of Printing Services for Post-examination Items:
This issue pertains to whether the printing of post-examination items like marks cards, grade cards, and certificates, after scanning OMR sheets and processing data, is an exempted supply of service under the same notification. The AAR affirmed this classification, and the Appellate Authority agreed, noting that these services are also related to the conduct of examinations and thus qualify for exemption under the specified notification.

3. Classification of Scanning and Processing Examination Results:
The question here is whether the scanning and processing of examination results are considered exempted services under the same notification. The AAR ruled affirmatively, treating these services as exempt. The Appellate Authority upheld this decision, emphasizing that these services are essential to the examination process and fall within the scope of the notification.

4. Applicability of Exemptions under Notification No. 12/2017-CGST (Rate) Dated 28-6-2017:
The appellant challenged the AAR's ruling on the grounds that the notification No. 12/2017-CGST (Rate) applies only to intra-state supplies. The Appellate Authority clarified that while the notification indeed pertains to intra-state supplies, a similar exemption is available for inter-state supplies under Notification No. 9/2017-Integrated Tax (Rate) dated 28-6-2017. Therefore, the services provided by M/s. Universal Print Systems to educational institutions in other states also qualify for exemption under the corresponding IGST notification.

5. Jurisdictional Applicability of CGST and IGST Notifications:
The appellant argued that the AAR's ruling extended beyond its jurisdiction by addressing inter-state supplies under a CGST notification. The Appellate Authority acknowledged this oversight but rectified it by referencing the appropriate IGST notification. It concluded that both intra-state and inter-state supplies of printing services related to examinations are exempt under their respective notifications, ensuring compliance with jurisdictional boundaries.

Conclusion:
The Appellate Authority modified the AAR's order, holding that the services rendered by M/s. Universal Print Systems to educational institutions concerning examination-related products fall within the exemption criteria of entry 66 of Notification No. 12/2017-CGST (Rate) dated 28-6-2017 for intra-state supplies and entry 69 of Notification No. 9/2017-Integrated Tax (Rate) dated 28-6-2017 for inter-state supplies.

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