Whether selling of religious books attract GST? If taxable, what would be the rate of GST and HSN Code & If exempted the category of exempted goods and HSN Code?

PJ/Case Law/2020-2021/3575

Ideal Industrial Synergy Solutions Private Limited Advance Ruling No. KAR ADRG 26/2019 dated 23.04.2020
Brief Facts: The applicant is in the business of carrying out manufacturing, designing, printing all types of confectionaries, brochures, stickers, aseptic bags, labels, hang-tags d pocket flashers, textile accessories like leather patches, Jeans button, etc.
The applicant states that he is involved in the printing and selling of religious books for various Islamic educational institutions across India and is desirous to know the applicability of tax on the transactions.

Issue: - Whether selling of religious books attract GST? If taxable, what would be the rate of GST and HSN Code & If exempted the category of exempted goods and HSN Code?
Appellant’s Contention: -The applicant contended that they are involved in the printing and supply of goods where the content is provided by the religious heads and they are printing the books and selling the same to the Madarasas. The books are not sold to the content providers but are sold to the religious schools as per the orders received from such schools.
The billing is also done to the Madarasas and the books are also supplied to the Madarasas. The Madarasas are not involved in the supply of content and this is received from the religious heads.

Reasoning of Advance Ruling: - It is found that the supply is made by the applicant to the Madarasas for a consideration and the contract is for the supply of books for consideration. This being in the course of business would amount to a supply of books as per sub-section (1) of section 7 of the CGST, 2017. There is no direct link between the recipient of books and the supplier of the content and the final product is supplied to the recipient of books and the content provider has no role to play in the selection of the recipient or the sale. Hence it is simply sale of books.
Further, the printed books are covered under HSN code 4901 1010 and are covered under entry no. 119 of Notification No.2/2017- Central Tax (Rate)dated 28.06.2017 and hence are exempt from tax under the CGST Act, 2017

Ruling: -
1. The supply of books by the applicant to the religious schools are supply of printed books which is covered under HSN Code 4901 and is exempt from tax as they are covered under following entries
a. Under the CGST Act, entry no. 119 of Notification No. 2/2017-Central Tax (Rate)dated 28.06.2017
b. Under the Karnataka Goods and Services Tax Act, entry no.119 of Notification (02/2017) No. FD 48 CSL 2017 dated 29.06.2017
c. Under the IGST Act, entry no. 119 of Notification No. 2/2017 -Integrated Tax (Rate) dated 28.06.2017

Conclusion: - Purely sale of manufacture or printing religious books to religious schools/institutions are not chargeable under GST due to covered entry no. 119 of Notification No. 02/2017- Central Tax (Rate) dated. 28.06.2017.

Comment- The Maharashtra Authority for Advance Ruling (AAR) in case of Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra has recently held that the income earned by religious organisations from sale of Books, DVD’s, magazines and other such materials along with food will attract GST, since they don’t count as “Charitable activities”. All such activities will be treated as business activities on which GST will have to be charged and paid. As per the GST Act, the advancement of religion or spirituality is exempt from GST as a charitable activity, but there is no specific exemption listed out in the Act in respect of the incidental or ancillary services by a trust. To qualify for any exemption, it is necessary that applicant qualify for each condition without any dependence on third party.
Prepared by CA Mahesh Parmar

Comments

PJ/Case Law/2020-2021/3575

Post a Comment

Query