TaxTMI 
TaxTMI 
2021 (8) TMI 537
X X X X Extracts X X X X
X X X X Extracts X X X X
....d there under. 3. Brief facts of the case: 3.1. The applicant was constituted as a society by the Government of Kerala as per G.O. (P) No. 17/766/ H.Edn dated 17.02.1976 of the Higher Education Department. The society is registered under the Travancore Cochin, Literary, Scientific and Charitable Societies Registration Act, 1955. The said society is running the printing press till date. The Governing body of the society consists wholly by officers from the Government. 3.2. They have progressed into the printing of lottery tickets and stationery items like brochures, diaries, calendars etc in addition to the textbooks for school children. Their customer for the printed textbooks and the lottery tickets is solely the State Government. In respect of the printed stationery items, the customers vary from State Government and its allied educational institutions to other departments of the State Government. The State Government does not charge GST on the school textbooks supplied by it to the end customers; i.e. allied educational institutions. The school textbooks are supplied on a no-profit / no-loss basis to the said educational institutions. They have been incurring losses on the pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hey may not be classifiable as Central Government, State Government, Union Territory or local authority they are a Governmental Authority / Government Entity as defined in the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. 5.3. The activity of printing carried out by them is a supply of service. The CBIC in Para 4 of Circular No. 11/11/2017 GST dated 20.10.2017 has clarified that 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 supply of service falling under heading 9989 of the scheme of classification of services, which is the SAC of Other manufacturing services; publishing, printing and reproduction services; material recovery services. In their case the entire content and its features that are to be printed are designed and given by the State Government in respect of all the activities of printi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services. 8. Urban forestry, protection of the environment and promotion of ecological aspects. 9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. 10. Slum improvement and upgradation. 11. Urban poverty alleviation. 12. Provision of urban amenities and facilities such as parks, gardens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. 15. Cattle pounds; prevention of cruelty to animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughter houses and tanneries. 5.7. They are a Governmental Authority as they have come into existence by virtue of being established by the State Government as a 100% State....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGST Act. The jurisdictional officer submitted that the activities of the applicant come within the purview of supply as per Section 7 of the GST Act and is taxable. There is no specific exemption available that the activities performed by the applicant come neither as a supply of goods nor a supply of services. As the activities of the applicant are not specifically exempted the applicant is liable to pay tax as per the GST Act. 7. Personal Hearing: The applicant was granted opportunity for personal hearing on 05.01.2021. Shri. K. Bindusaran, Consultant represented the applicant for personal hearing. He reiterated the contentions made in the application and subsequent to the hearing, forwarded detailed written submissions dated 07.01.2021. The contentions of the applicant in the application and in the Written Submission dated 07.01.2021 has already been extracted in detail in Para 5 above. 8. Discussion and Conclusion: 8.1. The matter was examined in detail. The issues to be determined are (i) Whether the activities of the applicant come within ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the course or furtherance of business will come under the scope and meaning of supply unless it is listed under Schedule III or notified by Government on recommendations of the Council to be treated neither as a supply of goods nor services. From the facts as stated in the application, the activities / transactions undertaken by the applicant squarely fall within the scope and meaning of 'supply' as defined in clause (a) of sub-section (1) of Section 7 of the CGST Act and the activities / transactions is neither specified in Schedule III nor notified in terms of clause (b) of sub-section (2) of Section 7 of the CGST Act. Therefore, the activities / transactions performed by the applicant constitute supply as defined in Section 7 of the CGST Act and accordingly are liable to GST unless specifically exempted by notification. 8.4. Having concluded that the activities undertaken by the applicant fall within the meaning and scope of supply and accordingly are liable to GST, the next issue to be determined is whether it constitutes a supply of goods or a supply of services. Admittedly, the applicant is engaged in printing of textbooks, lottery tickets and stationery items like Diary a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n be seen that the first condition to be satisfied by any person to qualify as a "Governmental Authority" is that the person should be either; (i) set up by an act of Parliament or a State Legislature; or (ii) established by any Government and the common condition applicable for both the above categories of persons are that they should have been set up or established with 90 per cent or more participation by way of equity or control to carry out any function entrusted to a Municipality under article 243W or to a Panchayat under article 243G. Admittedly, the applicant is not set up by an act of Parliament or State Legislature; but the applicant is established by G.O.(P) No. 17/ 766/H.Edn dated 17.02.1976 of the Higher Education Department of the Government of Kerala and accordingly falls under the second category above. Now it is to be examined whether the applicant satisfies the second condition-ie. Whether they are established to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. The relevant portion of the G.O.(P) No. 17/766/H.Edn dated 17.02.1976 is reproduced below; "The Governm....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... we have already concluded that the activities undertaken by the applicant namely the printing of textbooks, lottery tickets and stationery items come within the meaning and scope of supply and is a supply of services, the next issue to be determined is whether the services supplied by the applicant is exempted as per entries at Si Nos. 3, 4 or 5 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended. The entries at Si Nos. 3, 4 and 5 of the said notification reads as follows; "3 - Chapter 99 - Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution - Nil 4 - Chapter - 99 - Services by governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution - Nil 5 - Chapter - 99 - Serv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r welfare measures for the weaker section of the society. The use of proceeds of sale of the lottery by the State Government for funding social welfare schemes; ipso facto will not make the activity of conducting lottery an activity in relation to poverty alleviation as mentioned in 11th and 12th Schedule to the constitution and hence the service of printing of lottery tickets supplied by the applicant to the State Government cannot be considered as an activity in relation to any function entrusted to a Panchayat under article 243G or a Municipality under article 243W of the Constitution and accordingly is not eligible for exemption under any of the entries under Sl. Nos. 3, 4 or 5 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended. 8.11. The printing of stationery items like Diaries, Calendars etc cannot be considered as an activity in relation to any function entrusted to a Panchayat under article 243G or a Municipality under article 243W of the Constitution and accordingly the service of printing of Stationery items like Diary and Calendar etc provided by the applicant to the State Government is not eligible for exemption under any of the entries und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a supply of goods or services or both, within the meaning of that term. 10.1. As per Section 103 of the CGST Act the advance ruling pronounced by the Authority or the Appellate Authority shall be binding only on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 and the jurisdictional officer in respect of the applicant. 10.2. The relevant portion of Section 51 of the CGST Act is reproduced below; "51. Tax deduction at source- (1) Notwithstanding anything to the contrary contained in this Act, the Government may mandate- (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) such persons or category of persons as may be notified by the Government on the recommendations of the Council, to deduct tax at the rate of one per cent from the payment made or credited to the supplier of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees." It is evident from the above provisions of Section 51 of the CGST Act that it applies to prescribed and notified categories....