Classification of Printing of Content in Public Domain - Whether goods or services?

[Mith Moh]

A printer undertakes printing of religious books such as the Bible, Quran, Bhagavad Gita, and extracts or translations thereof. The content is in the public domain and is either supplied by the customer or independently sourced by the printer. The printer supplies the paper, ink, plates and all other consumables, manufactures the finished books, and supplies them to churches, temples, mosques, educational institutions and charitable or religious organizations. The books are intended for use as study material, reference books, translated publications or religious literature.

Circular No. 11/11/2017-GST dated 20.10.2017 clarifies that where only the content is supplied by the publisher or the person who owns the usage rights to the intangible inputs, while the printer supplies the physical inputs, the principal supply is printing and the transaction is classifiable as a service under Heading 9989. The Explanatory Notes to Group 99891 further state that the group covers transfer of intangible inputs for outsourced production and that the service provider does not own or retain the usage rights to the intangible inputs.

However, public-domain works have no exclusive copyright owner or publishing rights, and any person is legally entitled to reproduce and publish them.

In this context,:

1. Can public-domain content be regarded as an 'intangible input' transferred by the customer for the purposes of Group 99891?
   
2. Does the expression 'publisher or the person who owns the usage rights to the intangible inputs' in Circular No. 11/11/2017-GST include a person who merely has the legal right to reproduce public-domain content, or is it intended to apply only where the person owns or controls proprietary intellectual property?
   
3. Where the printer supplies all physical inputs and ultimately supplies printed books, should the transaction be classified as a printing service under Heading 9989 or as a supply of printed books under Chapter 49 (Heading 4901)?

AI Summary

Public-domain printing classification turns on intangible input rights and whether finished religious books constitute services or goods. GST classification is considered for printing public-domain religious literature where the printer supplies all physical inputs, manufactures finished books and supplies them to religious, educational or charitable institutions. The questions are whether public-domain content is an intangible input transferred for outsourced production, whether a mere right to reproduce such content satisfies the reference to ownership of usage rights, and whether the arrangement is a printing service under Heading 9989 or supply of printed books under Heading 4901.