TMI Blog2018 (10) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... supplies of Services has been provided under Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.02/2018-Central Tax ( Rate) dated 25.01.2018 - the services provided to educational institutions for conducting of examinations are eligible for exemption under entry No.66 of Notification No. 12/2017- Central Tax (Rate) dt. 28.6.2017. What would be the classification and the GST rate, for the supply of services in the nature of printing of cheque books in the below mentioned two situations where the physical inputs of paper belongs to (i) the customer banks; (ii) the applicant? - Held that:- In this case, assessees are undertaking two types of supplies. (i) In respect of paper supplied by the banks, they print the cheque format of respective banks and (ii) physical inputs including paper and ink would be borne by the company and the cheques after printing as per the bank s specifications, would be supplied to them. In both the cases, the unit prints the cheque and then supplies the cheque book to the bank after completion of the printing work - In respect of the situation, where the paper is being supplied by the banks, and the applicants are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, for printing and sale of Polyvinyl chloride (PVC) Cards for various customers? - Held that:- In terms of GST Circular No.11/11/2017-GSTdated 20.10.2017, it is clarified that, supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc. printed with logo, design, name, address or other contents supplied by the recipient of such printed goods, are composite supplies and the question, whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply - Principal supply has been defined in Section 2(90) of the Central Goods and Services Tax Act as supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. In the instant case since the PVC cards are belonging to the applicant, predominant supply is that of goods and the supply of printing of the content supplied by the recipient of supply is ancillary to the principal supply of goods and therefore such supply would be classified as supply of goods falling under chapter 3920 of the Customs Tariff as made applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the questions raised) which are given below. They have also submitted a copy of Challan evidencing payment of ₹ 10000/- towards application fee. ANNEXURE- I(Questions on which advance ruling is required) 1. Whether supply of service of: (i) Printing of Pre-examination items like question papers, OMR sheets (Optical Mark Reading), answer booklets; (ii) Printing of Post-examination items like marks card, grade card, certificates to the educational boards of up to higher secondary; and (iii) Scanning and processing of results of examinations; be treated as exempted supply of service by virtue of Entry No. 66 of the Notification No. 12/2017 - Central Tax (Rate), dated 28th June, 2017 and as amended by Notification No.2/2018 - Central Tax (Rate), dated 25th January, 2018; Entry No. 66 of Notification No. 12/2017 - State Tax (Rate), dated 29th June, 2017; and Entry No. 69 of the Notification No. 9/ 2017 - Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 2/2018- Integrated Tax (Rate), dated 25th January, 2018? 2. What would be the classification and the applicable GST rate, for the supply of Printing of cheque book? 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haar Cards for UIDAI: The Company has entered into contract with Unique Identification Authority of India (UIDAI) for provision of services of printing and despatching of Aadhaar Cards. For providing the said service the Company has to perform the following activities which includes: A. Data processing - The Company receives the data for printing from UIDAI in Unicode XML (Extensible Markup Language) file format. In order, to carry out the activity of printing the Company has to convert the file into a readable format, for which the Company is availing the professional services of Data processing from a third party service provider. This service is received by the Company in-house. B. Printing of photographs along with individual data of the Citizens. C. Lamination and enveloping - The Company has to laminate the Aadhaar card, post which it shall be enveloped and despatched to the card holder. D. Sorting of data - The Company has to collate and sort the data based on the parameters provided by UIDAI, like sorting of data based on the Pin Code', printing of barcodes allotted by UIDAI to track each envelope. E. Franking - Each envelope shall have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by way of (b) to an educational institution, by way of- (i) transportation (ii) catering (iii) security or cleaning (iv) Services relating to admission to, or conduct of examination by, such institution; (v) supply of online educational journals or periodicals: Provided that nothing contained in subitems (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution PROVIDING providing services by way of pre-school education and education up to higher secondary school or equivalent. Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of- (i) pre-school education and education up to higher secondary school or equivalent; or (it) education as a part of an approved vocational education course In this regard, the following are to be considered: (i) The services provided by the applicant to an educational board by way of printing of question papers, OMR sheets (Optical Mark Reading), answer booklets which enables ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the students, dual status, TSS GSS, total questions solved, total unsolved questions; Preparation of reports such as-consolidated reports; subject mismatch reports; discrepancy reports for correction in consultation of Board; statistical reports as and when required by the board; Validation and preparation of data base for regular student; The aforesaid details will be transmitted into high quality soft copy (CD/DVD) and excel format and the data will be submitted to the educational institutions; Result processing after re-verification of marks/re-evaluation of answer books Development of software for printing of duplicate certificate cum marks sheet. The applicant carries out the aforesaid activities as an agent for Concealed Results Processing through Barcode systems for examination conducted by the educational institution. Upon completion of this activity, action is taken by the educational institution for communication of results. These services provided by the applicant are directly related to conduct of examinations by the educational institution. Hence, the applicant submits that the aforesaid exemption as outlined in the notification will be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque paper should be classifiable as products of the printing industry , which will be Cheque . The Cheque paper is not the product of printing industry, but it is the cheque which is the product of the printing industry. (c) The printing was the primary purpose and without it, the cheque paper on which the matter was printed, is of no use to the appellant's customer. (d) The trade as well as in common parlance, treat these products as cheque and not cheque paper. (e) The product wherever printed must be classified having regard to what it means and how it is understood in common parlance. Thus being the case, it is the printing on the cheque paper, which communicates the message to the buyer that the product supplied to him is Cheque and not Cheque paper . The printing of the cheque communicates to the customer bank about the product and this serves a definite purpose of the customer bank. Thus, the applicant based on the above would prefer to the classification of the product which is printed by the applicant under the following Chapter heading as provided in Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017; Notification No. 2/2017- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated Tax (Rate), dated 13th October, 2017, which is as under: Sl.No. Heading Description of Service Rate (Per Cent) Condition 26 9988 (Manufacturing services on physical inputs(goods) owned by others) (ii) Services by way of treatment or process on goods belonging to another person in relation to (c) printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5% percent or NIL; TGST @ 2.5% percent or NIL; IGST @5% or NIL 2.5 - Thus, the applicant based on the above facts submits that the activity of printing of cheque, the goods being the cheque in the given case would fall under within the ambit of Chapter 4907. Such goods attracts the rate of tax i.e., CGST, SGST and IGST as NIL . Hence, the activity of printing of cheque carried out by the applicant will be liable to tax under GST as treatment of process on goods belonging to another registered person being in the nature job work at the rate of 5% (2.5% - Central Tax and 2.5% - State Tax or 5% - Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 39/2017-Integrated Tax (Rate), dated 13th October, 2017 which is as under: SI.No. Heading Description of Service Rate (Per Cent) Condition 27 9989 (Other manufacturing services; publishing, printing and reproduction services; materials recovery services) (i) Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books (including Braille books), journals and periodicals], which attract CGST @ 6 per cent or 2.5 per cent, or Nil; TGST @ 6 per cent, or 2.5 per cent, or Nil; IGST @ 12 per cent or 5 per cent or Nil. where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer. 6 Thus, the applicant based on the above facts submits that the activity of printing of cheque, the goods being the cheque in the given case would fall under within the ambit of Chapter 4907. Such goods attracts the rate of tax i.e., CGST, SGST and IGST as NIL . Hence, the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt further submits that serial No. 5 of Circular No. 11/11/2017GST, dated 20th October, 2017 which provides that: In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc. falling under Chapter 48 or 49, printed with design, logo etc. supplied by the recipient of goods but made using physical inputs including paper belonging to the printer, predominant supply is that of goods and the supply of printing of the content [supplied by the recipient of supply] is ancillary to the principal supply of goods and therefore such supplies would constitute supply of goods falling under respective headings of Chapter 48 or 49 of the Customs Tariff is ultra vires and quod contra legam fit, pro infectohabetur (What is done contrary to law is deemed not to have been done at all) as the Government is only empowered to notify transactions which are to be treated as 'supply of goods and not services or supply of services and not goods'. This power is vested under Section 7(3) of the CGST Act, 2017 and not to specify what the 'principle element in a transaction is'. It is important to note that this will always be transaction and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belonging to the applicant itself for various customers. These PVC cards are Plastic cards on which activity of printing is carried out by the applicant. The printed cards are in the nature of loyalty cards, identity cards and other cards of similar nature without any magnetic stripe. Thus, the applicant based on the above would refer to the classification of the product which is printed by the applicant under the following Chapter heading as provided in Notification No. 01/2017-Central Tax (Rate) dated 28th June, 2017, Notification No. 01/2017-State Tax (Rate) dated 29th June, 2017 and Notification No.1/2017-Integrated Tax (Rate) dated 28th June, 2017. Sl.No. Heading Description of Goods 106 3920 Other plates, sheets, film, foil and strip, of plastics, non-cellular and not reinforced, laminated, supported or similarly combined with other materials d with other materials Rate of tax The applicant submits that printing activity specified above shall be taxable at the rate specified in Entry No. 27 with heading 9989 (ii) of Notification No. 11/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of GST has been provided to the following supply of services as on date. 66. Services provided (a) by an educational institution to its students, faculty and staff; (aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee (b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; (v) supply of online educational journals or periodicals: ; Provided that nothing contained in entry sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicants, the impugned goods merit classification under Tariff heading 4907 as goods and they are an exempted supply in terms of Serial No 118 to the Notification No.02/2017-Central Tax (Rate) dated 28.06.2017. Hence, cheques or cheque books would not attract any GST and are an exempted supply in terms of the Notification. 3.3. What would be the classification and the applicable GST rate, for the supply of Aadhaar Cards on paper. 3.3.1 As per the information provided by the applicant, they receive the data for printing from UIDAI in Unicode (extensible mark up language) file format. The said file format would be converted into a readable format and the details of aadhaar applicants along with their photographs, would be printed , laminated, enveloped and after franking, the aadhaar envelops would be dispatched to the concerned aadhaar applicant. In the instant case, the applicant is rendering various supplies like conversion of data to the required file format, printing of aadhaar cards, lamination, franking and dispatching etc. In the entire gamut of things being undertaken by the applicant, all the supplies made by them, are naturally bundled and supplied in conju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient of such printed goods, are composite supplies and the question, whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply. 3. Principal supply has been defined in Section 2(90) of the Central Goods and Services Tax Act as supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. 4. In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services. 5. In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc. falling under Chapter 48 or 49, printed with design, logo etc. supplied by the recipi ..... 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