TaxTMI 
TaxTMI 
2022 (3) TMI 181
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....oods & Services Tax Act 2017 /Central Goods & Services Tax Act 2017 (hereinafter referred to the Act') by M/s. Temple Packaging Pvt. Ltd., (herein after referred to as the appellant" for the sake of brevity) The appeal is filed against the Order No.01/Daman/2019-20-AR dated 18.07.2019 passed by the Union Territory Authority for Advance ruling on the application for advance ruling filed by the appellant. The appellant is registered under GST vide GSTIN 25AAACT9039P1ZR. BRIEF FACTS OF THE CASE The appellant is engaged in the activity of printing leaflets (further divided into insert/outsert) and falling under CHS No. 4901, the said product is manufactured out of the inputs namely paper/ink owned by the appellants and content supplied by the clients mainly located in the pharmaceutical sector. The leaflets manufactured by the appellants are sold to the clients on agreed consideration which is entirely based on the manufacturing expenses incurred by the appellants by using inputs owned by the appellants. Under Central Excise regime they cleared the same as excisable goods under CHS No. 4901 as exempted being chargeable to NIL tariff rate, they migrated to GST regime w.e.f.....
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....unt for against capon obligation as they needed to fulfil the export obligation by delivering as goods under CHS No. 4901. APPLICATION FOR ADVANCE RULING In view of the above uncertainty regarding taxability on supply of leaflets, the appellant preferred an application before the Advance Ruling Authority seeking clarification on the following question: The printed leaflet supplied by the applicant falls under the category of supply of goods falling under CHS No. 4901 and not as a supply of service under SAC No. 9899. ADVANCE RULING PASSED BY Ld. AAR, DAMAN The learned authority on Advance Ruling considered the application made by the appellant and gave a ruling vide Order No. 01/Daman/2019-20-AR dated 18.07.2019 wherein it held as under: "In the present case against application dated 09.03.2018 of M/s. Temple Packaging Pvt. Ltd., behind Olive Healthcare. Hatiyawad, Village, Dabhel, Nani Daman, Advance Ruling is given that printing of Pamphlet/leaflet falls under the category of supply of service falling under SAC No. 9989. The case is disposed off accordingly." GROUNDS OF APPEAL Aggrieved by the decision of the Advance Ruling Authority, the Appellant h....
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....ainly in pharmaceutical sector cannot be termed as publishing matter and therefore covered under 4901. • Noti. No. 11/2017-CT (Rate) dated 28.06.2017 (Sr. No. 27). as amended prescribed the GST rate for SAC 9989 and as per the said entry reproduced below the content of priming job is required to be supplied in publisher (3) (4) (5) (i) Services by way of printing of all goods falling under Chapter 48 or 49 [including newspaper, books (including Braille books), journals and periodicals], which attract CGST @ 6 percent or 2.5 percent of NIL where only content is supplied by the publisher and the physical inputs including paper used for printing belong to printer. 6 • In the instant case, the clients are not the publishers but are from pharmaceutical industry and they are using printed leaflets as part of the medicament package and not using such supply for publication matter. Further it is pertinent to point out that the pharmaceuticals units arc subsequently selling the medicament as supply of goods and under no circumstances the supply of service can become a physical part of the goods. Accordingly, leaflets supplied by TPPL (the a....
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....ly as per Section 2(74) of CGST Act. 2017, has to be treated as supply of goods only in accordance with Section 8(a) of CGST Act, 2017 as per which in case of a composite supply comprising of two or more supply. one of which is a principal supply has to be treated as a supply of such principal supply. As per Section 2(90). principal supply means supply of goods or services which constitutes the pm-dominant element of composite supply and to which any other supply forming part of that composite supply is ancillary. in this case the entire value of the supply is representing supply of goods only and mere content of the leaflet is supplied by the clients. Accordingly, the principal supply is supply of goods only. • AAR illegally observed that applicant's case falls under Para-No. 4 of Circular No. 11/11/2017-GST dated 20.10.2017 which is mainly related to publishing matters and where content is supplied by the publisher as per requirement of the Service Tax Rate Noti No. 11/2017-CT (R) dated 28.06.2017 as amended. • AAR illegally proceeded to decide the case by observing in order that applicants are supplying pamphlet which is covered by para no. 4 of the....
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....icipate in partial virtual hearing. the hearing was partially held virtually through google meet on 17.09.2021. Shri Dinesh H. Mehta, Advocate on record for the company along with Shri Vikas Somaya and Ms. Kavita Swami. representative of the company attended and remained present in the office of Member UTGST whereas. the Member CGST attended and conducted the hearing virtually. The advocate submitted their written submission dated 17.09.2021 and reiterated the facts mentioned therein. The appellant in their written submission dated 17.09.2021 furnished the background of the case. their grounds of appeal and copy of Purchase orders, copy of relevant notifications. Compilation of judgments. copy of Supreme court judgment [(2005) 1 SCC 308 - 2004 (178) ELT. 22(S.C.)] and copy of compilation of pronouncements of various advance ruling authority. DISCUSSION AND FINDINGS We have carefully gone through the submissions made by the appellant. including oral deposition, the impugned order of the appellate authority and the applicable statutory provisions. We find that the issue to be decided by us is regarding the classification of the supply made by the appellant. From the submi....
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....ply or mixed supply. As per Section 2(30) of the CGST Act, 2017. "Composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Thus, for a supply to quality as a Composite Supply, following conditions are to be met: i) the supply must consist of two or more taxable supplies of goods or services or both: ii) such supplies should be naturally bundled and supplied in conjunction with each other in the ordinary course of business. The supply made by the appellant consist of the supply of paper i.e. goods as well as the service of printing of the content/instruction provided by the client, thus the first condition is fulfilled. The term "naturally bundled" has not been defined in the act; however, if various elements of supply are naturally bundled in the ordinary course of business, then it is to be considered as being naturally bundled. The concept or ordinary course of business depends on the nor....
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.... and where content is supplied by the publisher. They have further alleged that the authority illegally proceeded to decide the case by observing in order that appellants are supplying pamphlets which are covered by Para no. 4 of the circular. This appears to have been done as there is no mention of leaflet in Para no. 4 of the circular and leaflet is illegally equated with pamphlets for providing coverage of Para no. 4 of the circular. The appellant has asserted that their case is covered by Para no. 5 of the circular which is for products of Chapter 48 and 49, other than publishing matters. Hence, it becomes imperative for us to have a look at the said circular. The same is reproduced below for ready reference. Requests have been received to clarify whether supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc., printed with design, logo, name, address or other contents supplied by the recipient of such supplies, would constitute supply of goods falling under Chapter 48 or 49 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) or supply of services falling under heading 9989 o....
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.... circular, it is observed that Para no. 4 covers those items or goods which in itself may not be of any use to the client in absence of the content/instruction printed on it. The client approaches the supplier (the appellant) not for the purchase of a piece of paper i.e., a leaflet. but for getting the content/instruction printed on the paper or a leaflet, the utility of the leaflet for the client is that of a medium for conveying the message and instruction which is mandatory in the pharmaceutical sector, the leaflet is not used in the pharmaceutical industry as a goods or inputs but only as a medium of instruction. These instructions can generally be conveyed through a virtual medium (intangible) or through a leaflet (tangible). In the pharmaceutical industry such content/instruction which are mandatory, cannot be attested with the medicine through a virtual medium and hence the leaflets have to be made available with the medicines. The buyers of the medicine arc not interested in the piece of paper but the instructions mentioned in it would be fair to say that the client of the appellant would never accept the leaflet if the content as provided by them is not properly and correc....
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.... the printed leaflets under Ch 4901 since 2005 till June 2017. To substantiate their claim they have relied upon various pronouncements including the clarifications issued by CBEC (now CBIC) from time to time. the compilation of which they have submitted as Annexure-B with their submission. We have gone through each of these citations: we find that most of them are from the Central Excise tax regime, where them was no concrete concept of bundled supply. composite supply and mixed supply of goods and/or services or both. This concept for the taxation purpose has come up only during the GST regime. there cannot be any comparison between the two tax regimes on this issue and hence reliance cannot be placed on these citations as the concept of taxability has completely changed under GST. We have gone through the judgment of Constitution bench of Supreme Court in the case of Tata Consultancy Service v. State of Andhra Pradesh report in [2005) 1 SCC 308 - 2004 (178) E.L.T. 22 (S.C.)) put forth by the appellant in their defence submission. We are of the view that we have never denied that leaflet is goods. the issue to be decided before us not the classification of leaflet but it is re....