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TMI Blog2020 (12) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... Adarsh Nagar, Jaipur-302004 Rajasthan -(hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) given as under: - a. Classification of goods and /or services or both; Further, the applicant being a registered person (GSTIN is 08AAICM8786G1ZT as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling. A. SUBMISSION AND INTERPRETATION OF THE APPLICANT; 1. The applicant is engaged in the business of supplying answer booklets / copies to educational institutions. The process involves:- * procuring of raw material i.e. paper roll * performing the activity of printing of the content provided by such educational institution such as its Name, Logo, Serial No. and other particulars and lines on such paper roll with the help of the machinery. * Printed paper is then cut in required size and numbers. It is important to mention here that answer booklet is usually blank except for name of the educational institution on cover page wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is paper and thereafter, printing the content provided by educational institution such as its Name, Logo, Serial No. and other particulars and lines on such paper with the help of the machinery and once the printing is done the printed paper is cut in required size and numbers. Paper so cut is then stitched in required number of sheets to form answer booklet. It is important to mention here that lined pages of answer booklet are blank except for name of the educational institution on the cover page with some particulars and its logo on every page so that it can be identified to that educational institution. Then the number of booklets is arranged in lot of 100/200 to form bundles which are then packed and delivered to the educational institutions. Consideration from educational institution is received on the basis of number of Answer Booklets supplied. The major component of cost of the Answer Booklet is paper. Out of total cost per answer booklet approx.80% of cost is of the paper and the balance 20% is cost of printing, packaging etc. of the required content. Further, the printing is incidental to its primary use which is writing. The major cost of the answer booklet is of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de applicable to rate schedule of GST in terms of explanation (iii) and (iv) of the GST Rate Schedule. According to Chapter Note 12 paper or paperboard printed with motif, characters or pictorial representations not merely incidental to the primary use of the goods fall in Chapter-49. Whereas in the case of the applicant printing of name, logo and serial no. of educational institution is merely incidental to its primary use which is writing therefore, such answer booklets are classifiable under Chapter-48 of the GST Rate Schedule. Further, reliance is placed on the Circular No.1052/1/2017-CX dated 23.02.2017 issued under the Central Excise Regime relevant extract of which is reproduced as under: - Representations have been received from trade associations that consequent upon insertion of Chapter note 14 (w.e.f. 28-5-2012) to the Chapter 48 of Central Excise Tariff Act, 1985 disputes have cropped up in respect of classification of railway/bus/other tickets/passes, railway ticket rolls and bus ticket rolls, mark sheets/certificates, OMR Sheets/Answer Books with OMR, Answer booklets, inland letter cards, passbooks, applications forms, paper outer strip seal, Railway receipt (RR) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insertion of certain additional information for completion are excluded from this heading. (h) As per explanatory notes to heading 4907 (F), "Stock, share or bond certificates and similar documents of title are formal documents issued, or for issue, by public or private bodies conferring ownership of, or entitlements to, certain financial interests, goods or benefits named therein. Apart from the certificates mentioned these documents include letters of credit, bills of exchange, travellers' cheques, bills of lading, title deeds and dividend coupons. They usually require completion and validation." (i) As per explanatory note to heading 49.11, "Certain printed articles may be intended for completion in manuscript or typescript at the time of use but remain in this heading provided they are essentially printed matter. Thus, printed forms (e.g., magazine subscription forms), blank multi-coupon travel (e.g., air, rail and coach) tickets, circulars, letters, identity documents and cards and other articles printed with messages, notices, etc., requiring only the insertion of particulars (e.g. dates and names) are classified in this heading......". The heading 4911 also includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 29.06.2017 issued by Tax Division of Government of Rajasthan as amended? b) If not exempted service, then whether the said service is classifiable under Service Accounting Code / Head - 9989 or 9992 under CGST Notification No.11/2017-CT(Rate) dated 28.06.2017 as amended; IGST Notification No. 8/2017-Integreted Tax (Rate) dated 28.06.2017 as amended; Notification No. F. 12(56) FD/Tax/2017-Pt-I-49 dated 29.06.2017 issued by Tax Division of Government of Rajasthan as amended? c) What will be the rate of tax on such service under aforesaid notification? i. if classifiable under - 9989 whether a. 12% under S. No. 27(i) or b. 18% under S. No. 27(ii) of the Notification or; ii. if classifiable under - 9992 under S. No. 30 then 18% Applicant's interpretation of law a. Eligibility of exemption under Entry No. 66(b)(iv) of the Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, Entry No. 69(b)(iv) of Notification No. 2/2018- Integrated Tax (Rate) dated 28.06.2017, Entry No. 66(b)(iv) of Notification No. F. 12(56) FD/Tax/2017-Pt-I-50 dated 29.06.2017 issued by Tax Division of Government of Rajasthan The applicant submits that without causing prejudice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oklets to educational institution is towards conduct of examination. The service so provided by the applicant towards pre-examination items will be used by the educational institution for conduct of examination. The applicant submits that the aforesaid exemption as outlined in the notification will be applicable to the applicant's case. Thus, the services provided by the applicant to the educational institutions by way of supply of pre-examination materials will not be liable to Goods and Service tax. b. Classification The applicant submits that without causing prejudice to the fact that the supply of Answer Booklets to the Educational Institution is supply of goods if for the sake of discussion, it is presumed that such supply is supply of services then for deciding the classification following entries of Notification No. 11/2017- Central Tax (Rate) needs to be perused: - SI.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 27 Heading 9989 (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 CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 1 l/2017-CT(Rate) dated 28.06.2017 as amended; IGST Notification No. 8/2017-Integreted Tax (Rate) dated 28.06.2017 as amended; Notification No. F. 12(56) FD/Tax/2017-Pt-I-49 dated 29.06.2017 issued by Tax Division of Government of Rajasthan as amended? c) What will be the rate of tax on such service under aforesaid notification? i. if classifiable under - 9989 whether a. 12% under S. No. 27(i) or b. 18% under S. No. 27(ii) of the Notification or; ii if classifiable under - 9992 whether 18% PERSONAL HEARING In the matter personal hearing was conducted on 03.09.2020 through Video conference. Shri Ankit Totuka (Authorized Representative) of applicant appeared for personal hearing. During the personal hearing, he reiterated the submissions already made in the application. He further requested that the case may be decided at the earliest. D. COMMENTS OF THE JURISDICTIONAL OFFICER: Comments received from the Assistant Commissioner, CGST, Division -I, Jaipur vide letter dated 01.09.2020 are reproduced as under: - 1. The M/s Markk Business Private Limited i.e. the applicant is engaged in the business of supplying answer booklets/copies to educational institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1057/06/2017-CX 07.07.2017 has clarified that that exercise Books have been explained in HSN under explanatory note (2) to Heading 4820 as, "These may simply contain sheets of lined paper but may also include printed examples of handwriting for copying in manuscript". Such exercise Books are specifically classified under heading 4820 of the erstwhile CETA, 1985. These are nothing but stationary items having blank pages with lines for writing and may also include printed texts for copying manually. In common parlance they are more akin to handwriting "note books" for practicing rather than "work books" containing printed exercise. This definition of Exercise Books is in harmony with other items specified under Chapter Heading 4820 of erstwhile CETA, 1985 such as registers, note books, diaries, letter etc. where printing is incidental to their primary use i.e. writing. The fact that printing is incidental to their primary use is the guiding Principle for classification of Exercise Books under heading 4820 of erstwhile CETA, 1985. Printed work books on the other hand are books where printing is not merely incidental to the primary use. HSN Explanatory notes (A) to the heading 49. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / Answer copies and supplying it to Educational Institutions to be used in examinations by using its own raw material consisting of paper, printing ink etc. 4. The nature of the activity carried out by the applicant for printing of Answer Booklets/Answer copies with or without OMR and supplying it to Educational Institutions which is to be used in examinations by using its own raw material consisting of paper, printing ink etc. further it is observed that the content as provided by educational institutions such as its name, logo, serial No., watermark is printed on the answer booklets for its identification. The issue to be decided in this case is to whether the activity carried out by him will be treated as a supply of goods or supply of service. 5. In this regard, we find that the CBIC has issued Circular No. 11/11 /2017-GST dated 20.10.2017. which is as under: 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Regime relevant extract of which is reproduced as under: - Representations have been received, from trade associations that consequent upon insertion of Chapter note 14 (w.e.f. 28-5-2012) to the Chapter 48 of Central Excise Tariff Act, 1985 disputes have cropped up in respect of classification of railway / bus/ other tickets/passes, railway ticket rolls and bus ticket rolls, mark sheets/ certificates, OMR Sheets/Answer Books with OMR, Answer booklets, inland letter cards, passbooks, applications forms, paper outer strip seal, Railway receipt (RR) and practical notebook. Also, reports received from field formations suggest that there is divergent practice of assessment of these goods. It is therefore, proposed to clarify the classification of these goods to ensure uniformity in practice of assessment across the country. 2. In this connection, statutory provisions are as under: (a) As per Rule 3(c) of General Rules for the interpretation of the Schedule, "when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration". 4. in the light of above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Answer booklets with or without OMR fall under chapter heading 4820. It is including Note books, Exercise book, etc. where the predominant activity is its use for writing and printing is merely incidental or ancillary to the primary activity. 11. The goods falling under heading no. 4820 falls under Schedule II & III to the Notification No. 01/2017-Central Tax (Rate), dated 28/06/2017 as detailed below:- (i) 4820 (S. No. 123 of Schedule II): - Exercise book, graph book & Laboratory note book and Notebooks. (ii) 4820 (S. No. 154 of Schedule III): - Registers, account books, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, blotting pads, binders, folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery', of paper or paperboard; and book covers, of paper and paperboard [other than note books and exercise books]. The definition of the Notebook in the dictionary is that: - A notebook is a blank book that you can write in. Students often carry notebooks, where they can take notes (and doodle). The pages in a notebook are often lined, so that you can write neatly. Similarly, the Answer Booklets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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