2019 (3) TMI 1858 - AAR - GST

Classification of supply - supply of goods or supply of services? - printing of question papers on behalf of educational institutions - Levy of GST - rate of GST - HSN or SAC code - TRU Circular No. 11/11/2017-GST, dated 20-10-2017 - HELD THAT - It has been observed that - (a) The manuscript material for printing the question papers relating to the examination is supplied to the applicant by the Education Board/Educational Institutes. The scope of work of the applicant relates to compose, typeset, print, pack, transport, unload and supply sealed Question Papers to the Education Board/Educational Institutes. (b) As the usage right of the manuscript material of Question Papers (intangible inputs) are owned by the Education Boards/Educational Institutes and the physical inputs used for printing belong to the applicant, supply of printing is the principal supply in this case and the same would constitute supply of service falling under Heading 9989 of the scheme of classification of services. Rate of GST on supply - HELD THAT - It is observed as under - (a) As defined in clause (y) of Para 2 of the said Notification No. 12/2017-Central Tax (Rate) Educational Institutions means an institute providing services by way of - (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of curriculum for obtaining a qualification recognized by any law for time being in force; (iii) education as a part of an approved vocational education course. The benefit (exemption from payment of GST) of Sr. No. 66 of Notf. No. 12/2017-Central Tax (Rate) is admissible only in case where service is provided to an educational institution. (b)The services of printing of question paper, supplied by the applicant to other than educational institutions will be covered by Sr. No. 27(i) of Notf. No. 11/2017-Central Tax (Rate), as amended, and will attract Goods and Services Tax @ 12%.

Summary

Issues:
1. Classification of activity of printing question papers as supply of goods or services under GST.
2. Determination of GST applicability, rate, and HSN/SAC code for printing question papers.

Issue 1: Classification of activity of printing question papers

The applicant, engaged in confidential printing and supply services, sought clarification on whether printing question papers for educational institutions constitutes supply of goods or services. The applicant detailed their services, including printing pre and post-examination items and scanning and processing exam results for educational boards. The applicant argued that since they only provide printing services and do not own the content of question papers, their supply should be classified as a service under Heading 9989 of the classification of services. The Authority considered the applicant's submissions and noted that the usage rights of the manuscript material belong to the educational institutions, making printing the principal supply, thus classifying it as a service.

Issue 2: Determination of GST applicability, rate, and HSN/SAC code

Regarding the GST applicability and rate for printing question papers, the Authority analyzed the definition of 'Educational Institutions' under Notification No. 12/2017-Central Tax (Rate). It was observed that the benefit of GST exemption is applicable only when the service is provided to an educational institution. For services provided to entities other than educational institutions, the GST rate would be 12% (CGST 6% + SGST 6% or IGST 12%) under Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate). Therefore, the Authority ruled that the printing of question papers by the applicant is classified as a service under Heading 9989, and the GST rate applicable would be 12% for services provided to entities other than educational institutions.

This judgment by the Authority for Advance Ruling, Uttar Pradesh, clarified the classification of printing question papers as a service under GST and determined the applicable GST rate based on the recipient of the service.