TMI Blog2022 (8) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... falling under Heading 9989 of the scheme of classification of services - it is evident that Karnataka Secondary Education Examination Board is an educational institution for the limited purpose of providing services by way of conduct of examination to the students. The services provided by the applicant are exempted as per entry No.66 of Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017 as amended vide Notification No.02/2018-Central Tax (Rate) dated 25th January, 2018. In the instant case, the applicant is also supplying answer booklets, other formats used for and during examinations and envelopes for packing answer booklets printed with the content supplied by the recipient i.e., KSEEB made using physical inputs including paper belonging to the printer. Here, the usage of the products gives its essential characteristic while printing (of content supplied by the recipient of supplier) is an ancillary activity and therefore such supplies would constitute supply of goods falling under respective Headings of Chapter 48 and 49 of the Customs Tariff - The supply of answer booklets and other formats used for and during examinations falling under the heading 4802 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the conduct of examination would be covered by Sr. No. 66 (Heading 9992) of Notification No.12/2017-Central Tax (Rate), as amended and subject to Nil rate of tax? 4. Admissibility of the application: The question is about the Applicability of a notification issued under the provisions of this Act and Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both and hence is admissible under Section 97 (2) (b) (g) of the CGST Act 2017. 5. BRIEF FACTS OF THE CASE: The applicant furnishes some facts relevant to the issue: 5.1 The applicant states that they are proposing to submit a bid in response to the tender floated by the Karnataka Secondary Education Examination Board for the printing of question papers and other examination materials. 5.2 The applicant states that the Karnataka Secondary Education Examination Board is a statutory body established under the Karnataka Secondary Education Examination Board Act, 1966 for the purpose of holding and conducting public examinations. 5.3 The applicant states that the conduct of examinations is an essential an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ambit of the term educational institution by virtue of judgments not only of different High Courts but also affirmed by the Supreme Court. It has been held on several occasions that have the nature and functions being discharged by Boards and authorities constituted by the state Government and have held them to be educational institutions. 6.3 The applicant submits that in the case of Sahitya Mudranalaya Private Limited v Additional Director General, adjudicated by the Gujarat High Court on 29-01-2020, which was affirmed by the Supreme Court also held that examinations are an indispensable component of education, without which such education is incomplete. Therefore, to say that Boards/ Universities are not educational institutions would amount to divorcing examinations from education. 6.4 The applicant states that Clause (1) of Section 66D of the Finance Act may be examined in the light of the above. Sub-clause (i) of clause (1) refers to pre-school education and education up to higher secondary school or equivalent. When the sub-clause says education up to higher secondary school or equivalent, it goes without saying that it includes the examination leading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal 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. 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. 6.6.1 The manuscript material for printing the Question Papers, answer booklets/scripts, etc. relating to the examinations is supplied by the Board and the usage rights of the manuscript material of Question Papers, answer booklets/scripts, Circulars, Marks Cards (intangible inputs) are owned by the Board. In this connection, Section 21 of the Karnataka Education Act, 1983, states that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 belongs 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 . Hence in the subject case there is a supply of services and since the same are provided to educational institutions, the same shall be classified under Heading 9992 and will be exempted from payment of GST vide Entry No.66 of the Notification No.12/ 2017-Central Tax (Rate), dated 28th June, 2017 as amended. 5.5 Coming to the second part of the question i.e., 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 are also exempted under the said Notification, applicant is of the opinion that conduct of any examination by an educational i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board and the usage rights of the material of Question Papers, answer booklets/scripts, Circulars, Marks Cards (intangible inputs) are owned by the Board. Only the physical inputs used for printing belong to the Applicant. The issue to be decided here in this case is to whether the activities carried out by the applicant is to be treated as supply of goods or supply of services. 12. Circular No. 11/11/2017, dated: 20.10.2017 clarifies taxability of printing contracts as below: 1 .. 2 .. 3 .. 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 eta falling under Chapter 48 or49, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution 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 house-keeping 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 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 Nil Nil In view of the above, the services provided by the applicant in the para mentioned at 14 supra are exempted as per entry No.66 of Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017 as amended vide Notification No.02/2018-Central Tax (Rate) dated 25th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
