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2018 (10) TMI 201 - AAR - GSTClassification of Supply - Supply of goods or services? - Levy of GST - activity of printing of question papers for Secondary and Higher Secondary Education Boards of various states and also at the national level and for various education institutes - N/N. 2/2017-Central Tax (Rate) dated 28.06.2017. Whether activity of printing of question papers on behalf of educational institutions can be classified as activity of supply of goods or supply of services? If it is supply of services, referring to Sr. No. 27 of Notification 11/2017-CTR dtd 28.06.2017 as amended by Notification 31/2017-CTR dtd. 13.10.2017, then benefit of Sr. No. 66 of Notification 12/2017-CTR dtd.. 28.06.2017 is allowable, as amended by Notification No. 2/2017-CTR of 25.01.2018? If it is supply of goods, then question paper printing should be treated as exempted goods at Sr. No. 1 19 of exempted list liable at Nil rate of tax under Chapter heading / subheading of 4901 10 10 of Printed books including Braille books? or It should be covered by Schedule I at Sr. No. 201 liable to tax at 2.5% under Brochures, leaflets and similar printed matter, whether or not in single sheets ? Supply of goods or services? - Held that - The Government of India, Ministry of Finance, Department of Revenue, Tax Research Unit, vide Circular No. 11/11/2017-GST dated 20, 10.2017, has issued clarification on taxability of printing contracts - The manuscript material for printing the Question Papers relating to the examinations is supplied to the applicant by the Education Boards / 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. As the usage rights 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. Applicability of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, or Sr. No. 27 of Notification No. 11/2017-CentraI Tax (Rate) dated 28.06.2017, as amended, (and corresponding Notifications issued under the Gujarat Goods and Services Tax Act, 2017) to the supply of service - Held that - The expression relating to used in sub-item (iv) of item (b) of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) widens the scope of the said entry and printing of question papers would be covered by the phrase services relating to admission to, or conduct of examination by, such institution - the supply in this case would constitute supply of service falling under heading 9989 of the scheme of classification of services, whereas column 2 of Sr. No. 66 of Notification No. 12/2012-Central Tax (Rate) refers to Heading 9992. However, Explanation (ii) at Para 3 of the Notification No. 12/2017-Central Tax (Rate), as amended, clarifies that Chapter, Section, Heading, Group, or Service Code mentioned in Column (2) of the Table are only indicative . Therefore, merely on the ground of classification of the service of the applicant under heading 9989 would not preclude it from being covered by Sr. No. 66 of Notification No. 12/2012-Central Tax (Rate), if it is otherwise covered under the said entry - Therefore, services provided by the applicant to educational institutions by way of printing of question papers for conduct of examination by such institutions would be covered by Sr. No. 66 of Notification No. 12/2012-Central Tax (Rate), as amended. The service of printing of question paper, supplied by the applicant to other than educational institutions will be covered by Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate), as amended, and will attract Goods and Services Tax @ 12% (CGST 6% SGST or IGST 12%). Ruling - The activity of printing of question papers by M/s. Edutest Solutions Private Limited is activity of supply of service classifiable under heading 9989 of the scheme of classification of services. The service provided by M/s. Edutest Solutions Private Limited to educational institutions by way of printing of question papers for conduct of examination by such institutions would be covered by Sr. No. 66 of Notification No. 12/2012-Central Tax (Rate), as amended and Notification No. 12/2012-State Tax (Rate), as amended. The service provided by M/s. Edutest Solutions Private Limited to service recipients other than educational institutions by way of printing of question papers would be covered by Sr.No. 27(i) of Notification No 11/20.17-Central Tax (Rate), as-amended, and Notification No. 11/2017-State Tax (Rate), as amended. As the activity of printing of question papers by M/s. Edutest Solutions Private Limited is held to be activity of supply of service, the question of appropriate classification as goods and applicable rate on such goods does not arise.
Issues Involved:
1. Classification of the activity of printing question papers as supply of goods or services. 2. Applicability of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) for services provided to educational institutions. 3. Applicability of Sr. No. 27 of Notification No. 11/2017-Central Tax (Rate) for services provided to non-educational institutions. Detailed Analysis: 1. Classification of the Activity of Printing Question Papers: The primary issue is whether the activity of printing question papers by the applicant should be treated as a supply of goods or services. The judgment refers to Circular No. 11/11/2017-GST, which clarifies that the principal supply determines the classification. Since the manuscript material for the question papers is provided by educational institutions and the physical inputs belong to the applicant, the principal supply is the printing service. Therefore, this activity constitutes a supply of service under heading 9989 of the classification of services. 2. Applicability of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate): The next issue is whether the service provided by the applicant to educational institutions falls under Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate), which exempts certain educational services from GST. The notification includes services relating to the conduct of examinations by educational institutions. The phrase "relating to" broadens the scope, as established by the Bombay High Court in Coca Cola India Pvt. Ltd. vs. Commissioner of Central Excise, Pune-III. Thus, the printing of question papers for educational institutions is considered a service related to the conduct of examinations and is exempt from GST under Sr. No. 66. 3. Applicability of Sr. No. 27 of Notification No. 11/2017-Central Tax (Rate): For services provided to non-educational institutions, the judgment refers to Sr. No. 27 of Notification No. 11/2017-Central Tax (Rate), which covers printing services. The service of printing question papers supplied to entities other than educational institutions falls under Sr. No. 27(i) and attracts a GST rate of 12% (6% CGST + 6% SGST/IGST). Ruling: 1. The activity of printing question papers by the applicant is classified as a supply of service under heading 9989. 2. Services provided to educational institutions for printing question papers for examinations are covered by Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) and are exempt from GST. 3. Services provided to non-educational institutions for printing question papers are covered by Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate) and attract a GST rate of 12%. 4. Since the activity is classified as a supply of service, the question of classifying it as goods and determining the applicable rate for goods does not arise.
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