Whether the books supplied by the Chhattisgarh text book corporation as per instruction of school education department would tantamount to supply of goods or supply of service ?

PJ/Case Law/2018-2019/3514

Case: Chhattisgarh text book corporation

Citation: STC/AAR/08/2018

Issue: Whether the books supplied by the Chhattisgarh text book corporation as per instruction of school education department would tantamount to supply of goods or supply of service ?

BriefFacts: The issue involved in appeal are filed by M/s Chhattisgarh Text Book Corporation (CTBC), holding GSTIN 22AAAJC0421F1Z8. CTBC is a registered society under Chhattisgarh Society Registration Act,1973. It performs the works of publishing and distribution of books, consequent to getting it printed and distributes such books of different literature at economical prices or free of cost to all Govt, private, subsidized and non-subsidized schools. The applicant has filed an application for seeking advance ruling on supply of books as per instruction of school education department after printing will tantamount to supply of goods or supply of service and the applicant also wants clarification regarding tax rate liability on such supply as per GST Act.

Appellant Contention:- The appellant submitted that CTBC is registered society follows the byelaws of Governement society. The department of education gives instruction to applicant to publish and provide books to various Government schools. Its price is also decided by Board members. The SCERT, a wing of Government prescribes the syllabus and content of book. The Text Book corporation gets syllabus from him and pays the royalty for the same. The book contains publisher name as CGTB, content owner as SCERT and printer’s name. The CTBG purchase the paper and gives on job work basis to printers. CGTB circulates the book to different areas as per direction of Government. In case of excess book or wrong printing of books, the loss is bearable by CTBG.

Respondent’s Contention and Reasoning of Judgement: CTBG performs following activities namely preparation of syllabus, printing of books, upkeep of books and distribution to schools and transportation of books.

The definition of “Composite Supply” given under Section 2(30) of CGST Act, 2017 clearly covers this activity of printing, packing and distribution of books by CTBC. The ownership of such books always remains with the applicant and never transferred to School Education Department. The work of publishing and distribution of books, consequent to getting it printed and supply of books, printed with logo, design, name, address or other contents supplied by the recipient of such printed goods, are composite supplies. It is to be noted that in case of composite supplies, taxability is determined by the principal supply. It clearly indicates it been the case where the printer of books engaged by Chhattisgarh text book corporation for getting the books printed where only the content is supplied by the publisher and supply of printing would definitely qualify being treated as the principle supply and such supplies would constitute supply of service, which is not the case here. In the instant case the applicant has submitted that it provides such paper to job workers for getting the content printed as provide by SCERT. Therefore in view of the evidences furnished before us and as discussed above, we are inclined to hold that in this case supply of goods is involved which means ‘supply of specified printed educational books’, which is principal supply and accordingly we come to the considered conclusion that the said supply merits being treated as printed books and attracts zero rate, under notification no. 2/2017-state tax (rate) no.F-10-43/2017CT/V/70, dated 28.06.2017, under HSN code 4901.

Decision: It is considered as supply of goods which attracts zero rate.

Comment: The gist of this case is that supply of books by Chhattisgarh text book corporation to all the govt. private, subsidized and non-subsidized school as per direction of department of education is considered as supply of goods and attracts zero tax rate.

However, a circular number 11/11/2017 dated October 20, 2017 was issued by the CBIC wherein it was clarified that in printing of book where content belong to author then it is supply of service. However, in current decision, it is declared as supply of goods. Hence, again there is dispute between advance ruling and circular.

But a thin line can be drawn on the basis of facts of the case. The impugned CBIC circular is with respect of printer but here the Chhattisgarh Text Book Corporation is not printer but get it printed from someone else. However, the content belongs to other person in this case also.

Prepared by Kasif

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PJ/Case Law/2018-2019/3514

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