TMI Blog2019 (7) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... 84/03/2019 GST dated 01.01.2019 issued under F.No. 354/428/2018-TRU to the subject case at hand, it is found that the applicant is supplying services falling under SAC 998386 and the subject transaction is therefore covered under Entry 21 of Notification No. 11/2017- C. Tax (Rate) dated 28.06.2018 and attracts GST @ 18%. The activity of merely printing or reproducing the content given by the photographers / retail customers on pen drive, CD, memory card or any other storage media will be classifiable under Service Code 998386 and liable to tax @ 18%. - GST-ARA-130/2018-19/B-60 - - - Dated:- 24-5-2019 - SHRI B. TIMOTHY, AND SHRI B.V. BORHADE, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act respectively] by M/s. Colo Color (Prop. Hiral Pinkal Rambhia), seeking an advance ruling in respect of the following question. 1) Whether the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut by the Applicant. The Applicant states that the first relevant entry is under SAC Code 998912 as Printing and reproduction services of recorded media, on a fee or contract basis . Applicant states that the rate of CGST for services falling under SAC Code 9989 is prescribed under Entry 27 of Sch. to Notification No. 11/2017 C.T. (Rate) dtd 28.06.2017 as amended by Notification No. 20/2017 C.T. (Rate) dated 22.08.2017. 1.9. The Applicant submits that other relevant SAC for the classification of the above activity is under SAC 998386 as Photographic and videographic processing services . 1.10. Applicant States that the services falling under SAC 9983 are liable to CGST at 9% under Entry 21 of Schedule to Notification No. 11/2017-Central Taxes (Rate) - 28.06.2017. 3a. Statement containing the applicant s interpretation of law and or facts as the case may be, in respect of the aforesaid question(s) : 1. Applicant submits that by plain reading of the description of competing entries, the aforesaid activity of printing services provided by the Applicant falls under SAC 998912: 1.1. Applicant submits that in the present case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices of a recorded media provided by the Applicant falls under SAC 998912: 3.1. The Applicant submits that in the present case, the Applicant is providing the services of printing of content from a recorded media. The photographers provide the edited photos or albums to be printed in the advanced digital lab machines of the Applicant. 3.2. The Applicant states that it does not carry out any processing other than printing on such photographs provided on recorded media. In other words, the Applicant does not carry out any editing or other processes on the photographs provided by the clients. 3.3. Thus, looking at the actual activity of the applicant, the applicant is merely printing the content provided on recorded media. Therefore. on a plain reading of the two competing entries it is clear that the above activity is covered under 998912 being printing services of a recorded media. 3.4. Applicant does not provide any photographic or videographic processing services. Applicant is merely printing or reproducing the content given by the photographers from a recorded media to a paper. Hence, the applicant cannot he said to be providing services a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant on a contract basis. 5.4. In the present case, form the plain reading of the two competing entries, the services provided by the Applicant falls under SAC 998912. Thus, the above clarification is not applicable in the facts of the present case, 5.5. Assuming, without accepting the clarification of CBIC is applicable in the facts of the present case, then in such case the Applicant submits that the said Clarification is issued contrary to law and without considering the binding effect of the WBAAR. Thus, the said Clarification cannot be applied in the facts of the present case. 6. CBIC has erred in relying on the Explanatory Notes to the Scheme of Classification of Services for classifying the above activity in the clarification. 6.1. The Applicant submits that, Explanation (ii) to Notification No. 11/2017-CT(R) provides as follows: Reference to Chapter , Section or Heading , wherever they occur, unless the context otherwise requires, shall mean respectively as Chapter, Section and Heading in the annexed scheme of classification of services (Annexure). 6.2. Thus, for interpreting the Chapter, Section or Headi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the Applicant qualifies as printing services. The said activity is provided by the advanced digital lab printing machines employed by the Applicant. 6.5. Applicant does not provide the photographic processing services. The intention of the parties is to get the printing done through the advanced lab printing machines and not photographic processing: 6.6. Thus, from a plain reading of the competing entries in the Scheme of Classification of Service, the said activity will fall under SAC 998912. 6.7. Applicant submits that the CBIC has relied on the certain Explanatory Notes to the Scheme of Classification. The said Explanatory Notes do not form part of the Scheme of Classification of Service, neither any explanation is provided either in the Notification or under the Annexure to refer to Explanatory Notes in case of any ambiguity in classifying the activity of service. 6.8. Thus, reliance placed by the CBIC on the Explanatory Notes is without any basis and beyond the scope of legislation. The said Explanatory Notes do not form part of the Annexure - Scheme of Classification of Service. The said Explanatory cannot be reference point of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under erstwhile Service Tax regime (Finance Act, 1994) having Service Tax Registration No. AIEPR1584QSD001 for providing Photographic Services. At present the applicant is registered under the Central Goods and Service Tax Act, 2017 with GSTIN 27AIEPR1584Q1ZH for providing the same services. 3. The applicant receives images and photos in Pen Drive, CD, Memory Card or in any other storage Media from Photographers/ Retail Customers. 4. The applicant provides the photographers/ retail customers printing services in its highly equipped digital labs. The applicant prints the photographs in various sizes as per the requirement of the customers. 5. The relevant extracts of the explanatory note to the scheme of the classification of services related to the matter in Advance Ruling application are reproduced below: i) 998386 Photographic and videographic processing services This service code includes developing of negatives and the printing of pictures for others according to customer specifications such as enlargement of negatives or slides, black and white processing; colour printing of images from film or digital media; slide and ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to classification of printing of picture covered under the service code 998386. The relevant portion of the said circular is reproduced below:- i) It has been brought to the notice of the Board that the service of printing of pictures correctly covered under service code 998386 - Photographic and video graphic processing services is being classified by trade under service code 998912 - Printing and reproduction services of recorded media, on a fee or contract basis . The two service codes attract different GST rate of 18% and 12% respectively and therefore wrong classification may lead to short payment of GST. ii) The matter has been examined. According to Explanatory Notes to the scheme of classification of services, the service code 998386 Photographic and videographic processing services , includes, - developing of negatives and the printing of pictures for others according to customer specifications such as enlargement of negatives or slides, black and white processing; colour printing of images from film or digital media; slide and negative duplicates, reprints, etc.; developing of film for both amateur photographers and commercial clients ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04. HEARING Preliminary hearing in the matter was held on 02.04.2019. Sh. Rahul Thakar, Advocate, appeared and requested for admission of their application. Jurisdictional Officer Sh. Bhavesh Nandan, Supdt., Range-II, Mumbai Central also appeared and made written submissions. The application was admitted and called for final hearing on 07.05.2019. Sh. Rahul Thakar, Advocate, appeared, made oral and written submissions. Jurisdictional Officer Sh. Prabhakar Shetty, Supdt., also appeared made written submissions. We heard both the sides. 05. OBSERVATIONS AND FINDINGS: 5.1. We have gone through the facts of the case, written submissions and provisions of notification and clarification circular issued. The issue before us is in respect of classification of service code and applicable rate of taxes on transactions made by the applicant. 5.2 The applicant, a registered person under GST ACT, is engaged in providing printing services to photographers or retail customers. The Applicants prints the photographs in various sizes as per the requirement of the photographers and retail customers, who shoot images using Digital Cameras and provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions made by the applicant we find the Applicant is merely printing or reproducing the content given by the photographers or retail customers on a recorded media like pen drive, CD, Memory card or other storage area, etc. The editing or processing is done by the professionals or retail customers themselves. The Applicant merely does colour printing of images from film or digital media and supplies colour prints to the customers. The abovementioned Circular very clearly states that such colour printing of images from film or digital media of 998386 are exclusively excluded from the service code 998912 i.e. Printing and reproduction services of recorded media, on a fee or contract basis . Hence applying the provisions of the said Circular to the subject case at hand, we find that the applicant is supplying services falling under SAC 998386 and the subject transaction is therefore covered under Entry 21 of Notification No. 11/2017- C. Tax (Rate) dated 28.06.2018 and attracts GST @ 18%. 5.6 We also find that the Applicant has, in their defense, cited ARA order passed by the West Bengal AAR in the case of Photo Products Ltd. dated 30.05.2018 = 2018 (6) TMI 38 - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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