2018 (10) TMI 746 - AAR - GST

Classification of supply - Lab Manual comprising bulk of instructional /educational printed material - whether printing is merely incidental to the primary use or not? Whether Lab manual written by authors as prescribed by Educational Boards and which also contains, apart from chapter wise printed material and printed question and answers, some blank sheets / papers for exercise by students, would be classified under GST Tariff heading 4901 as Printed Books which carries Nil rate of tax or would it be classified under the GST tariff heading 4820 which attracts tax @ of 12% (CGST SGST) under the description Laboratory Notebooks ? Held that - Lab Manual is primarily a printed book in the major part with a smaller, yet not insignificant part dedicated to providing blank space to the students to do his/her written exercises. It is seen that this issue has been discussed in CBEC Circulars no- 1052/01/2017-cx dated 23.02.2017 and No. 1057/06/2017-cx dated 07.07.2017. As per Circular dated 07.07.2017, in case of Printed workbooks, where printing is not merely incidental to the primary use of the goods, it has been held such goods classified under printed workbooks fall in chapter 49, in contrast to cases where printing is incidental to the primary use i.e writing in which cases the goods have been held classified under the chapter heading 4820. In the present case, perusal of sample lab manual supplied by the applicant, clearly shows that printing is not merely incidental to the primary use, but actually forms a major part of the book and fulfills the primary objective of imparting knowledge to the student. Rather writing becomes the incidental part in the case on hand as the blank pages providing space to the students to write form a lesser part of the Lab manual and enables the students to write in the context of what they have learnt in the major printed instructional material of the book. The Lab Manuals being published by the applicant are rightly classifiable under the GST Tariff heading 4901 as printed books and would consequently carry Nil rate of tax which is presently applicable to the said heading. Ruling - The Lab Manual being published by the applicant which comprises of a bulk of instructional /educational printed material as per syllabus of educational board and which also contains some blank pages for the students to practice or write, would be classified under GST Tariff heading 4901 as printed books which currently carry a Nil rate of tax.

Summary

Issues Involved:

1. Classification of "Lab Manuals" under GST Tariff.
2. Determination of applicable GST rate for "Lab Manuals."

Issue-wise Detailed Analysis:

1. Classification of "Lab Manuals" under GST Tariff:

The applicant, a printing/publishing industry, sought to determine if Lab Manuals for classes 6th to 12th, printed according to educational board specifications and written by authors, fall under heading 4901, which attracts nil duty. The applicant argued that the Lab Manuals are comprehensive educational books containing the syllabus, questions/answers, and some blank pages for student exercises. They contended that these manuals should be classified under chapter 4901 as "printed books" based on various circulars and legal precedents.

The Authority for Advance Ruling examined the Lab Manual, which included 203 pages of printed instructional material and 158 blank pages for exercises. The primary use of the manual was identified as imparting knowledge through printed text, with the blank pages being incidental. The Authority referenced CBEC Circulars No. 1052/01/2017-CX and No. 1057/06/2017-CX, which distinguish between goods where printing is primary (classified under chapter 49) and where printing is incidental (classified under chapter 48). Based on this, the Authority concluded that the Lab Manuals, with their substantial printed educational content, are rightly classified under GST Tariff heading 4901 as "printed books."

2. Determination of applicable GST rate for "Lab Manuals":

The Authority further analyzed the applicable GST rate for the Lab Manuals. According to the GST Tariff heading 4901, printed books attract a nil rate of tax. The Authority noted that the classification principles from the Central Excise Tariff Act, 1985, are applicable under the GST Tariff, as both tariffs are aligned similarly for chapters 48 and 49.

In conclusion, the Authority ruled that the Lab Manuals published by the applicant, comprising mainly instructional/educational printed material with some blank pages for student exercises, fall under GST Tariff heading 4901 as printed books, carrying a nil rate of tax.

Advance Ruling:

The Lab Manual being published by the applicant, which comprises a bulk of instructional/educational printed material as per the syllabus of the educational board and also contains some blank pages for students to practice or write, would be classified under GST Tariff heading 4901 as printed books, which currently carry a nil rate of tax.