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TMI Blog2019 (6) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... mpted 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? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act" 02 FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- (Statement of relevant facts having a bearing on the questions raised) "1. Orient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is exempt by virtue of the notifications cited supra. Sr.No. Heading Description of Service Rate (Per cent) Condition 66 9992 (Education Services) Services provided - (a) by an educational institution to it's (aa) by an educational institution 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 sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of preschool 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 (ii) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. ?2018- Integrated Tay (Rate), dated 25th January, 2018. Hence, the said exemption notification has to be applied to the applicant's case. QUESTION: 2 As per the facts and circumstances as explained in Annexure Il, what would be the classification and the GST rate, for the supply of services in the nature of printing of Railway Tickets in the below mentioned two where the physical inputs of paper belongs to the applicant? 4. Applicant's interpretation of Law: Classification of supply 4.1 The applicant carries out the activity of printing on the paper in the above mentioned situations i.e., input (paper) belonging to the Company. Hence the product which is generated from the activity should be treated as "Railway Tickets" and not "Railway paper", due to the following reasons: (a) The railway tickets being a product which is generated after printing activity is done on Railway paper. After the activity of printing, the end product shall accordingly be construed as "Railway Tickets" and not "Railway paper". (b) The Railway tickets printed on the Railway paper should be classifiable as "products of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, any treatment or process which is applied to another person's goods is a supply service, and accordingly printing of cheque by the applicant shall be construed to be supply of service. The applicant submits that the aforesaid activity of "job-work" carried out by the applicant will be taxable at the rate specified in Entry No. 26 with heading 9988(ii) (c) of Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-Central Tax (Rate), dated 22nd August, 2017 and Notification No. 31/2017-CentraI Tax (Rate), dated 13th October, 2017; Notification Non 1/2017 - State Tax (Rate), dated 29th June, 2017 as amended by Notification G.O.Ms. No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification No. 8/2017- Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-lntegrated Tax (Rate), dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13th October, 2017, which is as under: SI.No. Heading Description of Service Rate (Percent) Condition 26 9988 (Manufacturing services on physical inputs (goods) owned by ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the applicant only prints such content on the paper. Accordingly the activity of printing on the paper will fall within the ambit of Entry No. 27 with heading 9989(i) of Notification No. 11/2017-CentraI Tax (Rate) dated 28th June, 2017 as amended by Notification No. 20/2017-CentraI Tax (Rate) dated 22nd August, 2017 and Notification No. 31/2017-Central Tax (Rate) dated 13th October, 2017, Notification No. 11/2017 -State Tax (Rate) dated 29th June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification No. 8/2017-lntegrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-lntegrated 'Tax(Rate) dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13th October, 2017 which is as under: SI.No. Heading Description of Service Rate (Percent) Condition 26 9988 (Manufacturing services on physical inputs (goods) owned by others) printing and reproduction services; materials recovery services) i) Services by way of printing of all 6 (Manufacturing goods falling under Chapter 48 or services on 49 [including newspapers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for printing belongs to the OPL itself: In the above scenarios, the OPL prints the Cheques, loose or in Book form and then supplies the same to various Customer Banks once the final output is ready. (iii) Printing of Railway Tickets for Indian Railways OPL provides the services of printing of Railway Tickets to Indian Railways (a) Physical inputs i.e. paper alone supplied by customer i.e Indian Railways, however inks which are used for printing belong to the OPL itself; (b) Physical inputs including paper and inks which are used for printing belong to the OPL itself; In the above scenarios, the OPL prints the Tickets and then supplies the tickets to the Indian Railways once the final output is ready. (Statement containing the OPL's interpretation of law and/or facts, as the case may be, in respect of the aforesaid questions) 1. Question -1: 1.1 Whether, in the facts and circumstances as explained in Annexure II, supply of service of: (i) Printing of examination items like question papers, OMR sheets (Optical Mark Reading), Answer booklets for conducting of an examination by the educational boards or institutions be treated as exempted supply of service by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute suppIy of service falling under heading 9989 of the scheme of classification of services." In OPL's case, all the content is owned and provided by the customer and OPL only prints the content on the examination booklets and further supplies such examination booklets to the customer. Once the examination booklets are printed with the material supplied by the educational institution, such examination booklet cannot be used by any other institution or board. It is exclusively for the use of the customer of OPL. This entails that the transaction will be covered by the above referred paragraph and the transaction shall be classified as a supply of services. (ii) the services provided by the OPL to an educational board or institution are by way of printing of question papers, OMR sheets (Optical Mark Reading), answer booklets which enables the educational institution / universities to conduct the examination. The said service provided by the OPL to the educational institution is towards conduct of examination. Since, the service provided by OPL towards the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the facts and circumstances as explained in Annexure II, what would be the classification and the GST rate, for the supply of services in the nature of printing of cheques in the below mentioned two cases, where the physical inputs of paper belongs to the OPL and where the physical inputs of paper belongs to the customer? 4. OPL's interpretation of Law: Classification of supply 4.1 OPL carries out the activity of printing on the paper in the above mentioned situations i.e., input (paper) belonging to the OPL. Hence, the product which is generated from the activity should be treated as 'Cheques, due to the following reasons:- (a) The cheques being a product which is generated after printing activity is done on specially procured paper. After the activity of printing, the end product shall accordingly be construed as "cheques" and not "cheque paper". (b) The Railway tickets printed on the cheque paper should be classifiable as "products of the printing industry", which will be "cheques". The paper is not the product of printing industry, but it is the cheques which is the product of the printing industry. (c) The printing was the primary purpose and without it, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Rate), dated 22nd August, 2017 and Notification No. 31/2017-CentraI Tax (Rate), dated 13th October, 2017; Notification No.11/2017 -State Tax (Rate), dated 29th June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate); dated 23rd November, 2017; Notification No. 8/2017- Integrated Tax (Rate), dated 28th June 2017 as amended by Notification No. 20/2017-lntegrated Tax (Rate), dated 22nd August, 2017 and Notification No. 39/2017-lntegrated 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; SGST @ 2.5% percent or NIL; IGST @ 5% or NIL 2.5 Thus, OPL 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 attract the rate of tax i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed ticket without its monetary value is just a piece of paper. OPL supplies printed tickets to its customers. Thus, the OPL based on the above would prefer to the classification of the product which is printed by the OPL under the following Chapter heading as provided in Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017; Notification No. 2/2017- State Tax (Rate), dated 29th June, 2017 and Notification No. 2/2017-lntegrated Tax (Rate), dated 28th June, 2017, in absence of an entry specifically covering the railway tickets under the mentioned notifications. Sl.No. Heading Description of Goods, 115 4907 Railway tickets Accordingly, the rate of tax applicable to the product is NIL (i.e., NIL - Central Tax and NIL - State Tax or NIL - Integrated Tax). 5.2 Physical inputs i.e., paper belonging to customers:- OPL submits that Section 2(68) Of the Central Goods and Service Tax ('CGST") Act, 2017 and the State Goods and Service Tax ("SGST") Act, 2017 provides the meaning of 'job work' which reads as under: "Job work" means any treatment or process undertaken by a person on goods belonging to another registered person and the expression "job worker" shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpretation of the law in all the above questions as below - Sr.No. Transaction Inputs belonging to Tax Rate Notification reference 1 Printing of question papers, OMR sheets, Answer booklets OPL NIL Entry No. 66 of Notification No. 12/2017 - CT(Rate) as amended from time to time 2 Printing of marks card, grade card, certificates OPL NIL Entry No. 66 of Notification No. 12/2017 - CT(Rate) as amended from time to time 3 Printing of cheque and chequebooks OPL NIL Entry No. 118 of Notification No. 2/2017 - CT(Rate) as amended from time to time 4 Printing of cheque and chequebooks Customers (Banks) 5% Entry No. 26 of Notification No. 11/2017 - CT(Rate) as amended from time to time 5 Printing of railway tickets OPL NIL Entry No. 115 of Notification No. 2/2017 - CT(Rate) as amended from time to time 6 Printing of railway tickets Customers (Railway) 5% Entry No. 26 of Notification No. 11/2017 - CT(Rate) as amended from time to time 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- With reference to above subject M/s. Orient Press Ltd. has filed application for Advanced Ruling in respect of quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument. Cheque if statutory declaration wherein bank is under obligation to pay mentioned amount to payee. Thus it replaces 'Money' & therefore it is intention of legislature to exempt supply of cheque vide notification. Thus 'Cheque' receives its value as a cheque only when it is issued by any bank which is authorized by RBI to do so. Unless and until such authorization is there cheque will be nothing but a printed paper and therefore unless it is issued by Bank it will be classifiable as "Product of the printing industry" & therefore will not be exempted under heading 4907. Similarly railway ticket is something which accrues its meaning as ticket only when it is sold by railway or its authorised representative. It is promise made by railway to allow Journey as mentioned on ticket. I would also like to draw your attention towards S.143 of Railways Act which is reproduced here for your ready reference. 143. (1) If any person, not being 'a railway servant or an agent authorised in this behalf,- (a) carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the GST Act. We therefore take up the issues individually as under:- 5.2 ISSUE NO.1: (i) Whether supply of service of Printing of examination items like question papers OMR sheets (Optical Mark Reading), Answer booklets for conducting of an examination by the educational boards or institutions can be treated as exempted supply of service by virtue of the Notification No. 12/2017 - CT (Rate), dated 28th June, 2017 as amended and (ii) whether supply of service of Printing of Post examination items like marks card, grade card, certificates to educational boards (up to higher secondary) after scanning of OMR Sheets and processing of data in relation to conduct of an examination can also be treated as exempted supply of service by virtue of the same notification. 5.3 As per under Entry No. 66 of the Notification No. 122017 - C T (Rate), dated 28th June, 2017 as amended, services provided to an educational institution, by way of Services relating to admission to, or conduct of examination by, such institution falls under Heading 9992 (Education Services and exempted from payment of GST. Such services are exempted only if they are, in the subject case, related to conduct of examina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where (i) the physical inputs of paper belongs to the applicant and (ii) the physical inputs of paper belongs to the Railways.? 5.7 The applicant has submitted that in both the cases, they perform the work of printing on such papers, presumably with content which is given by the Railways. According to their submissions the product that is generated from their activities is 'Railway Tickets' and not 'Railway Paper'. The applicant has submitted that the subject product which is printed by the applicant is covered under Chapter Heading 4901 (as railway Tickets) as provided in Sr. No. 118, Notification NO. 2/2017-Central Tax (Rate), dated 28th June, 2017 and exempted under GST. The jurisdictional office has submitted that a railway ticket is something which accrues its meaning as ticket only when it is sold by railway or its authorised representative. Hence the service provided by applicant is towards printing services & it cannot be exempted. 5.8 Chapter Hdg 4802 deals with various types of paper like cheque paper, currency note paper, etc. and the GST rate for such paper is 12%. There is no doubt in our minds that Railway paper on which printing is done will fall under this Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Chapter Heading 4907 00 90 and are subject to Nil rate vide Notification No. 2/2017-C.T. (Rate) dated 28.06.2017. In a situation where the applicant does printing of cheques and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under under Heading 9989 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 as amended which covers "Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books physical inputs (including Braille books), journals (goods) owned and periodicals], which attract by others) CGST @ 6 per cent or 2.5 per cent, or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printed" and is taxable at 12% GST. In a situation where the applicant does printing of cheques where physical input i.e. paper is supplied by the client, then the same will also be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (ii) (c) i.e. "Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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