AI Drafter 
TaxTMI 
TaxTMI 
2020 (7) TMI 378
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....ence to the CGST Act would also mean a reference to the same provision under the APGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or AP GST Act would be mentioned as being under the GST Act. 3. Brief Facts of the case: 3.1 M/s Macro Media Digital Imaging Private Limited, Plot 44, Apparel Export Park, Auto Nagar, Visakhapatnam-530012, (hereinafter referred to as the Applicant) is engaged in the business of printing of trade advertising material, for which required raw materials such as poly vinyl, flex, paper, cloth printing inks etc. are being procured by themselves. The activity of printing is based on specification provided by the clients in terms of design, size, material specification etc. The applicant states that their activity of printing on such poly vinyl material with trade monograms of the customers constitutes 'manufacture' in terms of Central Goods and Service Tax Act 2017 and such manufactured products are supplied by the applicant to the customers. 3.2 The applicant besides having its main office at Visakhapatnam, operates from the various regional offices located at Chennai, Noid....
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....t. The Applicant is provided with the designed trade advertisements by the customers. The Applicant merely sources the desired PVC material (blank) from independent supplier and under takes the activity of printing on the material. 3.7 That billing format of the invoices raised by the Applicant on the customers is such that in the description field, Applicant specifies charges on two accounts i.e. 'printing' and 'supply', wherein the former represents the service activity of printing carried out by the Applicant and latter represents the physical supply of printed trade advertisements on the PVC material. Pre-GST Regime 3.8 That under the erstwhile Value Added Tax (hereinafter referred to as 'VAT') regime, the Applicant was paying VAT on the transaction of printing and supply of the trade advertisements. However, under different states, the nature of such transaction varied from 'pure sale' transaction to a transaction of 'works contract'. The state-wise status of such transactions wherein Applicant had VAT registration is as under:- S.No. State Nature of Transaction 1. Telangana Works Contract 2. Tamil Nadu Pure Sale 3. Maharashtra Work....
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..... Applicant's Interpretation of Law and Facts: 5.1 Supply of trade advertisement amounts to supply of 'goods'. (1) Interpretation of definitions of 'goods' and 'services' under CGST Act That Rule 2(52) of the CGST Act defines the term 'goods' as under: - "(52) "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; From the above definition of goods, it is clear that any property which is movable and is not in form of money or securities, shall qualify to be 'goods'. (2) The term 'service', has been defined under Section 2(102) of the CGST Act as under:- "(102) "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; The above referred definition of 'service', clarifies that in order to determine if the end resul....
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....T Act. (8) The Applicant further understands that Section 9 of CGST Act read with Schedule II Sl.No. 1(a) provides that: "any transfer of the title in goods is a supply of goods" (9) In the instant case, the Applicant is transferring the title in the goods qua printed materials. Therefore, instant case of supplying printed advertisement materials amounts to supply of 'goods'. (10) The Applicant refers to TRU Circular No. 11/11/2017-GST dated 20.10.2017 on taxability of printing contracts wherein vide Para 5 it was clarified that printing contracts, similar to the instant case, constitute 'supply of goods'. The relevant extract is reproduced below for ready reference: "5. In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc. falling under Chapter 48 or 49, printed with design, logo etc. supplied by the recipient of goods but made using physical inputs including paper belonging to the printer, predominant supply is that of goods and the supply of printing of the content [supplied by the recipient of supply] is ancillary to the principal supply of goods and therefore such supplies would constitute supply of go....
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....ich are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply" (15) Supply consists of two or more supplies of goods, or services or both- the Applicant submits that in the single economic supply of trade advertisements to the customers, the Applicant is making two supplies, namely: (1) Supply of goods - Printed PVC material; and (2) Supply of services - Printing of content supplied by customer on PVC material (16) Two supplies are naturally bundled - It is stated that the two aforementioned supplies made by the Applicant to its customers are naturally bundled and supplied in conjunction with one another in ordinary course of business. That the objective of a customer to procure a printed trade advertisement from the Applicant to procure such goods (trade advertisement) which are used to promote the products/business of the customer by using the same. It is submitted that such....
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.... a main service. * The other instructive indicators can be the following :- a) There is a single price or the customers pays the same amount. b) No matter how much of the package the actually received. c) The elements are normally advertised as a package. d) The different elements are not available separately. 41. From the application of the above indicators we hold that the contract for providing the design, procurement, supply, development, testing and commissioning of the Plant which includes the supply of both goods and services is a composite supply as per the definition in the Act. There are two taxable supplies- one of goods and the other of services and they both are naturally bundled and it is natural and also a practice to expect that the contractor who will supply the goods will also supply the services along with it. In the business of contracts for the Solar Power Generating System, it is a practice to provide a Plant as a whole along with the supply of services." (18) In view of the foregoing, the Applicant states that PVC material (blank) and printing of image/written text on such ....
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....or merely printing. However, such is not the case in the transactions effected by the Applicant. Undisputedly, the Applicant is supplying complete trade advertisement which includes PVC material and printed images/text/trade monograms on such PVC material; This fact also goes on to establish that transactional arrangement between the Applicant and customer was always to supply and receive goods in form the of trade advertisements. (23) In view of the foregoing, it is submitted that pre-dominant supply in the composite supply of trade advertisement is supply of 'goods' by the Applicant to its customers. (24) The Applicant also submits that element of printing is ancillary to the composite supply of trade advertisements. The Applicant submits that design of image/ text/trade monograms to be printed on the concerned trade advertisement is provided by the customer and Applicant has no role to play in designing/ alteration of the same. Mere work to be carried out by the Applicant is to load such linage/text/trade monograms on the computer controlled digital image printer and to take out prints on the PVC material (blank). The Applicant does not employ any skill for provision of se....
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....as 'service'. 5.2 Trade advertisements manufactured and supplied by the applicant are classifiable under chapter 49 of the COST act. (1) The Applicant prints advertisements on PVC material (blank) by using a computer controlled digital image printer. This activity can be categorized as under, Chapter Note 2 to Chapter 49 of the Customs Tariff, reads as For the purposes of Chapter 49, 'printed' also means reproduced by means of a duplicating machine, produced under the control of a computer, embossed, photographed, photo-copied, thermocopied or typewritten. It is noteworthy that the expression "produced under the control of a computer" is also covered under the term 'printed'. As stated above, the activity undertaken by the applicant on the PVC material (blank) is 'printing'. (2) In view of the above, if a product is printed PVC sheet or printed PVC flex is plastic material falling under Chapter 39, the relevant Heading of Chapter 39 is Heading 3920 or Heading 3921. A perusal of the goods falling under these headings would show that the printed plastic sheets would also fall under these headings. (3) However, Section Note 2 to Section VII which covers goods of Chap....
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.... and supplied by the applicant are classifiable as 'supply of goods'. (ii) The printed advertisement material are classifiable under chapter heading 4911 of the GST Tariff and the rate of tax applicable is 6% CGST + 6% SGST as given in the Notification No. 1/2017 - Central Tax (Rate)dated 28.06.2017, (G.O.Ms No. no, Revenue (CT-II) Department, Di. 29-06-2017)" (7) Reliance is also placed on the following cases which deal with similar issue: i. Gopsons Papers Ltd. - 2015 (324) ELT 5 (SC) = 2015 (10) TMI 443 - SUPREME COURT ii. Universal Offsets v. CCE, Delhi-II - 2018 (10) G.S.T.L. 386 (Tri. - Del.) = 2018 (1) TMI 1086 - CESTAT NEW DELHI iii. Fitrite Packers - 1999 (108) ELT 680 (Tri) = 1999 (3) TMI 175 - CEGAT, NEW DELHI iv. Bharat Metal Decorators - 2005 (185) ELT 397 = 2005 (3) TMI 237 - CESTAT, MUMBAI v. Sai Security Printers Ltd. - 2006 (199) ELT 121 (Tri.) vi. Indradhanush Print. Pvt. Ltd. - 2013 (292) ELT 81 (Tri) = 2014 (3) TMI 913 - CESTAT BANGALORE (8) In view of ....