TaxTMI 
TaxTMI 
2019 (6) TMI 1172
X X X X Extracts X X X X
X X X X Extracts X X X X
....and the applicable GST rate, for the supply of Printing of cheque book/ railway tickets be treated as exempted supply of service by virtue of Entry No. 66 of the Notification No. 12/2017 - Central Tax (Rate), dated 28th June, 2017 and as amended by Notification No.2/2018 - Central Tax (Rate), dated 25th January, 2018; Entry No. 66 Of Notification No. 12/2017 - State Tax (Rate), dated 29th June, 2017; and Entry No. 69 of the Notification No. 9/2017 -Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 2/2018- Integrated Tax (Rate), dated 25th January, 2018? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act" 02 FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pretation of Law: 2.1 Applicant submits that the service provided to an educational institution, by the applicant in relation to conduct of examination by an institution is exempt by virtue of the notifications cited supra. Sr.No. Heading Description of Service Rate (Per cent) Condition 66 9992 (Education Services) Services provided - (a) by an educational institution to it's (aa) by an educational institution by way of (b) to an educational institution, by way of (i) transportation (ii) catering (iii) security or cleaning (iv) Services relating to admission to, or conduct of examination by, such institution; (v) supply of online educational journals or periodicals:" 'Provided that nothing contained in sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of preschool education and education up to higher secondary school or equivalent. Provided further that nothing contained in sub-item (V) Of item (b) shall apply to an institution providing services by way of (i) pre-school education and education up to higher seconda....
X X X X Extracts X X X X
X X X X Extracts X X X X
....une, 2017 and as amended by Notification No.2/2018 - Central Tax(Rate), dated 25th January, 2018; Entry No. 66 of Notification No. - State Tax(Rate), dated 29^th June, 2017; and Entry NO. 69 of the Notification No. 9/2017 - Integrated Tax (Rate), dated 28^th June, 2017 as amended by Notification No. ?2018- Integrated Tay (Rate), dated 25th January, 2018. Hence, the said exemption notification has to be applied to the applicant's case. QUESTION: 2 As per the facts and circumstances as explained in Annexure Il, what would be the classification and the GST rate, for the supply of services in the nature of printing of Railway Tickets in the below mentioned two where the physical inputs of paper belongs to the applicant? 4. Applicant's interpretation of Law: Classification of supply 4.1 The applicant carries out the activity of printing on the paper in the above mentioned situations i.e., input (paper) belonging to the Company. Hence the product which is generated from the activity should be treated as "Railway Tickets" and not "Railway paper", due to the following reasons: (a) The railway tickets being a product which is generated after printing activity is done....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heques undertaken by the applicant is on the input i.e., paper, belongs to customer bank, who are registered persons. Hence, the process of printing undertaken by the applicant should be construed as "job-work". Further, in terms of Entry No. 3 of Schedule II appended to the CGST Act, 2017, any treatment or process which is applied to another person's goods is a supply service, and accordingly printing of cheque by the applicant shall be construed to be supply of service. The applicant submits that the aforesaid activity of "job-work" carried out by the applicant will be taxable at the rate specified in Entry No. 26 with heading 9988(ii) (c) of Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-Central Tax (Rate), dated 22nd August, 2017 and Notification No. 31/2017-CentraI Tax (Rate), dated 13th October, 2017; Notification Non 1/2017 - State Tax (Rate), dated 29th June, 2017 as amended by Notification G.O.Ms. No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification No. 8/2017- Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....It is important to note that this will always be transaction and business specific; it cannot be specified on an all-pervasive basis. Hence, the applicant submits that the activity provided by them is purely a "service" in relation to printing where the content to be printed is specified by the Indian Railways and the applicant only prints such content on the paper. Accordingly the activity of printing on the paper will fall within the ambit of Entry No. 27 with heading 9989(i) of Notification No. 11/2017-CentraI Tax (Rate) dated 28th June, 2017 as amended by Notification No. 20/2017-CentraI Tax (Rate) dated 22nd August, 2017 and Notification No. 31/2017-Central Tax (Rate) dated 13th October, 2017, Notification No. 11/2017 -State Tax (Rate) dated 29th June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification No. 8/2017-lntegrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-lntegrated 'Tax(Rate) dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13^th October, 2017 which is as under: SI.No. Heading Des....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us banks: OPL provides the services of printing Of Cheques, loose or in book form to various customer banks and there exists the following two scenarios, where the: - (a) Physical inputs i.e. paper alone supplied by customer banks, however inks which are used for printing belong to OPL itself; (b) Physical inputs including paper and inks are used for printing belongs to the OPL itself: In the above scenarios, the OPL prints the Cheques, loose or in Book form and then supplies the same to various Customer Banks once the final output is ready. (iii) Printing of Railway Tickets for Indian Railways OPL provides the services of printing of Railway Tickets to Indian Railways (a) Physical inputs i.e. paper alone supplied by customer i.e Indian Railways, however inks which are used for printing belong to the OPL itself; (b) Physical inputs including paper and inks which are used for printing belong to the OPL itself; In the above scenarios, the OPL prints the Tickets and then supplies the tickets to the Indian Railways once the final output is ready. (Statement containing the OPL's interpretation of law and/or facts, as the case may be,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... can be classified as supply of goods or supply of services for the printing industry transactions. Para 4 of the Circular is reproduced below - "4. In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute suppIy of service falling under heading 9989 of the scheme of classification of services." In OPL's case, all the content is owned and provided by the customer and OPL only prints the content on the examination booklets and further supplies such examination booklets to the customer. Once the examination booklets are printed with the material supplied by the educational institution, such examination booklet cannot be used by any other institution or board. It is exclusively for the use of the customer of OPL. This entails that the transaction will be covered by the above referred paragraph and the transaction ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 28th June, 2017 and as amended by Notification No.2/2018 - Central Tax(Rate), dated 25th January, 2018; Entry No. 66 of Notification No. 12/2017 - State Tax(Rate), dated 29th June, 2017; and Entry No. 69 of the Notification No. 9/2017 - Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 2/2018- Integrated Tax (Rate), dated 25th January, 2018. Hence, the said exemption notification has to be available to OPL. QUESTION: 2 As per the facts and circumstances as explained in Annexure II, what would be the classification and the GST rate, for the supply of services in the nature of printing of cheques in the below mentioned two cases, where the physical inputs of paper belongs to the OPL and where the physical inputs of paper belongs to the customer? 4. OPL's interpretation of Law: Classification of supply 4.1 OPL carries out the activity of printing on the paper in the above mentioned situations i.e., input (paper) belonging to the OPL. Hence, the product which is generated from the activity should be treated as 'Cheques, due to the following reasons:- (a) The cheques being a product which is generated after printing activity is done on sp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le II appended to the CGST Act, 2017, any treatment or process which is applied to another person's goods is a supply service, and accordingly printing of cheque by the OPL shall be construed to be supply of service. OPL submits that the aforesaid activity of 'job-work" carried out by the OPL will be taxable at the rate specified in Entry No. 26 with heading 9988(ii)(c) of Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-CentraI Tax (Rate), dated 22nd August, 2017 and Notification No. 31/2017-CentraI Tax (Rate), dated 13th October, 2017; Notification No.11/2017 -State Tax (Rate), dated 29th June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate); dated 23rd November, 2017; Notification No. 8/2017- Integrated Tax (Rate), dated 28^th June 2017 as amended by Notification No. 20/2017-lntegrated Tax (Rate), dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13th October, 2017, which is as under: Sl.No. Heading Description of Service Rate (Per Cent.) Condition 26 9988 (Manufacturing services on physical input....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stood in common parlance. Thus being the case, it is the printing on the Railway paper, which communicates the message to the buyer that the product supplied to him is "Railway Tickets" a not "Railway paper". The printing of the Railway Tickets communicates to the Indian Railway about the product and this serves a definite purpose of the Indian Railways. (f) The printed railway ticket assumes a fiduciary value once it has been printed with the monetary value of the journey to be undertaken by the passenger. The printed ticket without its monetary value is just a piece of paper. OPL supplies printed tickets to its customers. Thus, the OPL based on the above would prefer to the classification of the product which is printed by the OPL under the following Chapter heading as provided in Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017; Notification No. 2/2017- State Tax (Rate), dated 29th June, 2017 and Notification No. 2/2017-lntegrated Tax (Rate), dated 28th June, 2017, in absence of an entry specifically covering the railway tickets under the mentioned notifications. Sl.No. Heading Description of Goods, 115 4907 Railway tickets Accordingly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts submits that the activity of printing of railway tickets, the goods being the railway tickets in the given case should fall under within the ambit of Chapter 4907. Such goods attract the rate of tax i.e., CGST, SGST and IGST as "NIL". Hence, the activity of printing of railway tickets carried out by the OPL will be liable to tax under GST as treatment of process on goods belonging to another registered person being in the nature job work at the rate of 5% (2.5% - Central Tax and 2.5% - State Tax or 5% - Integrated Tax.) 6. To sum up, OPL submits their interpretation of the law in all the above questions as below - Sr.No. Transaction Inputs belonging to Tax Rate Notification reference 1 Printing of question papers, OMR sheets, Answer booklets OPL NIL Entry No. 66 of Notification No. 12/2017 - CT(Rate) as amended from time to time 2 Printing of marks card, grade card, certificates OPL NIL Entry No. 66 of Notification No. 12/2017 - CT(Rate) as amended from time to time 3 Printing of cheque and chequebooks OPL NIL Entry No. 118 of Notification No. 2/2017 - CT(Rate) as amended from time to time 4 Printing of che....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the classification and the applicable GST rate, for the supply of printing of cheque book/railway tickets. As regards to tax rate on supply of Cheque I submit that the 'Cheque' is not an ordinary paper but it's an financial instrument which promises to pay to bearer or payee certain amount. I reproduce here definition of cheque under the negotiable instruments Act 1881. "Cheque" : - A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. "Bill of exchange" : A "bill of exchange" is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. Cheque if statutory declaration wherein bank is under obligation to pay mentioned amount to payee. Thus it replaces 'Money' & therefore it is intention of legislature to exempt supply of cheque vide notification. Thus 'Cheque' receives its value as a cheque only when it is issued by any b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing on 06.02.2019. Sh. R.P.Mody, Advocate and Sh. Prakash Maheshwari, Director appeared made oral and written submissions. Jurisdictional Officer was not present at the time of hearing but has made written submissions. 05. OBSERVATIONS 5.1 We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional office. The applicant is engaged in the business of providing the services of printing of security documents to various clients like Government Authorities and agencies, Banks, Educational Boards / Institutions and Private Companies. We find that the applicant has raised 3 questions in respect of supply of services executed by them and the main issue is whether the said supply is exempted under the GST Act. We therefore take up the issues individually as under:- 5.2 ISSUE NO.1: (i) Whether supply of service of Printing of examination items like question papers OMR sheets (Optical Mark Reading), Answer booklets for conducting of an examination by the educational boards or institutions can be treated as exempted supply of service by virtue of the Notification No. 12/2017 - CT (Rate), dated 28th June, 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng of data are also exempted under the said Notification, we are of the opinion that conduct of any examination by an educational Institute includes both pre examination works, actual conduct of the exams and post-examination works. Hence for reasons mentioned in para no. 5.4 above we hold that such supply is also a supply of services and classifiable under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 122017 - Central Tax (Rate), dated 28^th June, 2017 as amended. We do not agree with the jurisdictional officer who has opined that the said supply is a supply of goods and not services. 5.6 ISSUE NO 2 : What would be the classification and the GST rate, for the supply of services in the nature of printing of Railway Tickets where (i) the physical inputs of paper belongs to the applicant and (ii) the physical inputs of paper belongs to the Railways.? 5.7 The applicant has submitted that in both the cases, they perform the work of printing on such papers, presumably with content which is given by the Railways. According to their submissions the product that is generated from their activities is 'Railway Tickets' and not 'Railway ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5.10 In a situation where the applicant does printing for Railway Tickets and uses physical input i.e. paper supplied by the Railways then the same will be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (iia) i.e. "Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST@ 6%" 5.11 ISSUE NO 3 : What would be the classification and the GST rate, for the supply of services in the nature of printing of cheques for their clients (i) the physical inputs of paper belongs to the applicant and (ii) the physical inputs of paper belongs to the concerned Banks? We find that "cheques, lose or in book form, are covered under Chapter Heading 4907 00 90 and are subject to Nil rate vide Notification No. 2/2017-C.T. (Rate) dated 28.06.2017. In a situation where the applicant does printing of cheques and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under under Heading 9989 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 as amended which covers "....