TaxTMI 
TaxTMI 
2022 (6) TMI 1254
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....ed the 'Applicant') is registered under GST Vide GSTIN 33AABCK2495F1ZP. They have sought Advance Ruling on the following question: 1. Manufacture and supply of printed leaflet product on the physical inputs owned by the printer while the matter of printing content being supplied by the recipient is classifiable as supply of goods or supply of services as per the provisions of GST Act. 2. While supplying such printed leaflet product whether HSN heading under 4901 of GST Tariff Act or SAC code 9989 is applicable. 3. Determination of tax liability payable on such printed leaflet product supplied as above. The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are one of the suppliers of printed leaflet product to M/s. Hindustan latex Ltd, a Government of India enterprise who in turn supply the said leaflet product along with their own manufactured rubber product namely 'Condemn'. The leaflet product is supplied by the....
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....a State, Kerala State on the physical inputs owned by the supplier printer while the printing matter content being supplied by the recipient and on the determination of tax liability payable on such printed leaflet product. It is also requested that the order of the Advance ruling Authority may please be intimated to the recipient of supply namely M/s. Hindustan Latex Ltd; Karnataka State, Kerala State. 2.2 On the legal interpretation, the applicant has stated that GST includes supply of goods or supply of service or both. For classifying a transaction whether as supply of goods or supply of service there are some norms available in the Schedule II formulated as per Section 7(1A) of CGST Act 2017. As per the available instructions the transaction of manufacture of printed articles and supply thereof using their own inputs (paper or paper board) and the printing content being supplied by the recipient has to be decided either as a supply of goods or as supply of service. For the determination of such classification in the case of supply of printed articles CBIC issued some parameters / clarifications vide their circular bearing No. 11/11/2017-GST dated 20-10-2017. The circular cl....
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....d the content is supplied by the recipient. He referred to the clarification of CBIC Circular No. 11/11/2017 dated 20.10.2017. He further stated that they have entered in to a contract with M/s Hindustan Latex Ltd. He was asked to furnish copies of contracts, Purchase orders, invoice copies for the transaction for which ruling is sought. 3.2 The applicant filed a written submission dated 11.03.2022, wherein, he reiterated the divergent practice prevailing in classifying the supply of printed leaflets and requested clarification. The copies of price bid forms along with rate of tax quoted by other suppliers along with specimen copies of their invoices and some other specimen products were submitted. 3.3 In pursuance of the Virtual Personal hearing held on 16.3.2022, the applicant submitted the copy of Tender Form HLL, price bid of other units and their unit, rate of Tax, Invoice Copy of their units and other suppliers, and the copy of Board Circular No. 11/11/2017 GST Dt. 20.10.2017 On 8.4.2022, the Registry asked the applicant to furnish copies of contracts, purchase orders and invoice copies for the transaction for which ruling is sought. In response to the letter 8.4.2022, ....
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.... supply. Here, the principal supply is to convey the message to the customers in printed medium, therefore printing service is the principal supply in this matter and the applicant is rightly charging the tax under HSN: 9989 at the rate of 18% (including CGST and SGST). 5. Center Jurisdictional Officer vide their letter GEXCOM/TECH/GST/1065/2022-Tech-O/o Commr -CGST-Madurai dated 06.04.2022 informed that there are no pending proceedings on the issue raised in the Advance Ruling application. 6. We have carefully examined the submissions of the applicant in their application, their oral and written submission during the personal hearing, their further submissions after PH and the comments of the State & Centre jurisdictional officer in the instant case. The questions on which advance ruling is sought are as follows: (i) Whether Manufacture and supply of printed leaflet product on the physical inputs owned by the printer while the matter of printing content being supplied by the recipient is classifiable as supply of goods or supply of services as per the provisions of the GST Act. (ii) While supplying such printed leaflet product whether HSN heading under 4901....
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....5% • Tax Invoice No. 000030 dated 03.10.2018 of V.P. Mehta & Co raised on INDOCO Remedies Ltd against Order No. HP/1819/00528 dated 20/07/2018 with the Description 'Leaflets paracetamol 500mg caplet' and SAC Code 49011020. IGST is raised @5% • Price Schedule of 'Sudana Printers' of Contract No. PUR 08/RI/PQ/OCP/11/2021-22 dated 18.02.2021 for supply of Leaflet to HLL Lifecare Limited, Kerala wherein the GST rate is quoted @5% of the Basic Rate • Price Schedule of The Coronation Arts Crafts' of Contract No. PUR 08/RI/PQ/OCP/11/2021-22 dated 18.02.2021 for supply of Leaflet to HLL Lifecare Limited, Kerala wherein the GST rate is quoted @ 12% of the Basic Rate • PO No. 3110134560 dated 16.08.2021 in Enquiry/Tender No. 1110523478 for 'Leaflet Instr. Mala-N' printed on specific paper using specific ink colour/Art Work to be supplied in folded condition & in Bundles of 50 Nos. 7.3 From the submissions, it is seen that the Enquiry letter/Tender are floated for supply of Leaflets and based on the Price Schedule of the contract, PO are issued to the bidders. It is stated that the PO is issued with the rates o....
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..... Thus the supply is a composite supply as per the definition at Section 2(30) of the Act stated above. The predominant element in this composite supply is the one for which the recipient is under taking the transaction with the supplier, i.e., printing of the leaflets. The supply of the material on printing is only ancillary to the main supply. Also, the Purchase Order is raised for 'Printed Leaflets' and of the value of supply is arrived at based on the number of such printed leaflets required. The recipient has undertaken this transaction with applicant mainly to avail the printing services of the applicant. Further, CBIC vide Circular No. 11/11/2017-GST dated 20.10.2017, has clarified as to what constitutes the 'Principal supply' in composite supply of printing contracts. The same is reproduced as under, for ease of reference: Subject: Clarification on taxability of printing contracts 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....
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....e physical inputs used are that of the printer and • 'Supply of goods' is the 'Principal Supply' in cases where the printing of such content is ancillary to supply of goods as in the cases of Para 4. In the considered transaction, the supply undertaken by the applicant involves printing and supply as leaflets in the required format; the content which instructs the users of the product in words, intangible inputs whose rights are with customer and shared with the applicant for printing in the required material/media. The nature of the physical inputs is transformed with the printing activities and without the printing, the final product cannot be used as a leaflets as required by the recipient. Thus the predominant activity is printing the contents of the customer in the required tangible inputs sourced by the applicant as per the requirement of the recipient and going by the clarification above, the principal supply in the considered transaction is 'Supply of Service'. It is pertinent to note that this authority in an earlier instance in the case of M/s. Macro Media Digital Imaging Pvt Limited under similar facts, has held that the supply of ....