Printing services for educational institutions qualify as principal supply in composite arrangements under GST notification 12/2017 serial 66(b)(iv)

The AAR Telangana ruled that printing services for educational institutions constitute the principal supply in a composite supply arrangement. The applicant's supply of printing question papers, OMR sheets, and answer sheets was classified under service heading 9989, as educational institutions own the content rights while the applicant provides physical printing materials. The printing service qualifies for GST exemption under notification 12/2017 serial 66(b)(iv) when supplied to educational institutions for examination purposes, but would attract 12% GST if supplied to non-educational entities under notification 11/2017 serial 27(i).

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Issues Involved:
1. Classification of services provided by the applicant.
2. Applicability of GST exemption under Notification No. 12/2017.

Summary:

Issue 1: Classification of Services Provided by the Applicant

The applicant, M/s. Y S Hitech Secure Print Private Limited, is engaged in security printing services for educational institutions, including question papers, OMR sheets, answer sheets, and certificates. The primary concern is whether these services are classified as supply of goods or services. The judgment clarifies that the supply of printed question papers and related materials is a composite supply where printing services are the principal supply. This classification is based on the fact that the educational institutions provide the content to be printed, and the applicant uses its own paper and ink for printing. Consequently, the services fall under Heading 9989 as per the scheme of classification of services.

Issue 2: Applicability of GST Exemption under Notification No. 12/2017

The applicant sought clarification on the applicability of the GST exemption for services provided to educational institutions under serial no. 66(b)(iv) of Notification No. 12/2017. The judgment references Circular No. 151/07/2021-GST, which clarifies that services related to the conduct of examinations, such as printing of question papers, are exempt from GST when provided to educational institutions. The exemption is applicable to services provided to educational institutions as defined in the notification, which includes institutions providing pre-school education, education up to higher secondary school, and education as part of a curriculum for obtaining a recognized qualification.

Ruling:

The Authority for Advance Ruling concluded that the supply of printing services, including test papers, OMR sheets, certificates, and other related materials, to educational institutions qualifies as a composite supply with printing services as the principal supply. As such, these services are exempt from GST under serial no. 66(b)(iv) of Notification No. 12/2017-CT(R).

Conclusion:

The supply of printing services to educational institutions, when using the applicant's own paper and ink, is considered a composite supply where printing services are the principal supply. These services are exempt from GST as per the relevant notification, provided they relate to the conduct of examinations by educational institutions.

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