Whether activity of printing of question papers on behalf of educational institutions can be classified as activity of supply of goods or supply of services?

PJ/Case Law/2020-2021/3585

MAXWELL CO. PVT. LTD, 2020 (32) G. S. T. L. 545 (A. A. R. – GST – U.P.)
Brief Facts:-The applicant is in the business of confidential printing and supply of Board/University examination papers. It has filed an application for advance ruling to determine classification and taxability of printing of question papers under GST.
Issue:-Whether activity of printing of question papers on behalf of educational institutions can be classified as activity of supply of goods or supply of services?
Applicant Contention:-The contention of the Applicant is that the content of the printed matter is specific to the customer and the applicant does not have any ownership on the content at any point of time.
Reasoning of the Judgement:-The Authority observed that as per the provisions of the Circular 11/2017 and the business which is undertaken by applicant is printing of examination papers for Secondary and Higher Secondary Educational Boards as well as for State Universities. The content of the printed matter is specific to the customer and the applicant does not have any ownership on the content at any point of time. The question papers are not the property of the Applicant; hence, title of the above printed matters cannot be transferred. Those question papers are not marketable commodities in the open market. As the usage right of the material of question papers are owned by the Education Boards/ Educational Institutes and physical inputs used for printing belong to the applicant, printing of question paper constitutes supply of service classified under Heading 9989.
In case the services of printing of question papers are given to ‘educational institution’ which includes institutes providing pre-school education and education up to higher secondary school or equivalent, education as a part of curriculum for obtaining a qualification recognized by any law for time being in force or education as a part of an approved vocational education course, then such services are exempt from GST. However, if services of printing of question paper are provided by the applicant institutions to other than ‘educational institutions’, then GST at the rate of 12% shall be applicable.
Decision:-The services of printing of question paper, supplied by the applicant to other than educational institutions will be covered by Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate) and will attract Goods and Services Tax @ 12%.
Comment:-Since the printing of question papers is not marketable the said classification has been made under the service component as the principal supply fall under service category. The AAR in case of M/s Department of Printing, Stationery and Publication held that these services are not eligible for GST exemption and 12% of GST is applicable on the activity of printing and supply of textbooks to government departments which are registered under GST Act. However, the authority clarified that in the case of the printing and supply of textbooks to government departments that are not registered under the GST Act, the applicant is exempted from the liability to pay tax.
Moreover, in AAR Ruling of Sukee Print Pack LLP relating to GST on Printing of books etc. for which materials are provided by customers, it was held that in the case where applicant is supplying the paper and paper board printed with content supplied by the recipient of the goods made using physical inputs including paper belonging to the recipient and –
a. If the final printed material is a book or a journal or a periodical and if the materials on which the printing is done are provided by the customers, then the activity would be covered under entry 26(i)(d) Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 and would be liable to tax at 2.5% CGST plus 2.5% SGST.
b. If the final printed material is other than a book or a journal or a periodical but the involves the jobwork of printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6 per cent, then the activity would be covered under entry 26(ia)(b) of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 and is liable to tax at 6% CGST plus 6% SGST.
c. If the jobwork of printing made on the materials belonging to other is not covered by the above two items, then the same is liable to be covered under Entry No. 26(iii) of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time and is liable to tax at 9% CGST plus 9% SGST.
2. In the case where the paper and paper board along with content supplied by the recipient of the goods and the applicant prints the content on the paper and paper board supplied by the recipient of the goods by using the physical inputs belonging to the printer, then
a. If the supply of services is related to the printing of newspapers, books (including Braille books), journals and periodicals, then such supplies are taxable under entry no. 27(i) of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time and is liable to tax at 6% CGST plus 6% SGST.
b. If the supply of service is related to the printing of materials other than newspapers, books (including Braille books), journals and periodicals, then such supplies are taxable under entry no. 27(ii) of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time and is liable to tax at 9% CGST plus 9% SGST.

Prepared By- CA Kartik Singhvi

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PJ/Case Law/2020-2021/3585

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