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2019 (6) TMI 1172 - AAR - GSTClassification of supply of services - rate of tax - Printing of Pre-examination items - Printing of Post-examination items - Scanning and processing of results of examinations - exempt supply or not - business of providing the services of printing of security documents to various clients like Government Authorities and agencies, Banks, Educational Boards / Institutions and Private Companies. Supply of service of Printing of examination items like question papers OMR sheets (Optical Mark Reading), Answer booklets for conducting of an examination by the educational boards or institutions - exempt services or not - N/N. 12/2017 - CT (Rate), dated 28th June, 2017 as amended - Circular No. 11/11/2017-GST dated 20.10.2017 - HELD THAT - As per under Entry No. 66 of the Notification No. 122017 - C T (Rate), dated 28th June, 2017 as amended, services provided to an educational institution, by way of Services relating to admission to, or conduct of examination by, such institution falls under Heading 9992 (Education Services and exempted from payment of GST. Such services are exempted only if they are, in the subject case, related to conduct of examination by such institution. The question papers, OMR sheets (Optical Mark Reading), answer booklets are very essential and necessary requirements to conduct any examination. To print question papers the content i.e. the questions will be provided by the institution conducting the examination. The contents of the OMR sheets and answer sheets will also be provided accordingly by the institution - 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. 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? - HELD THAT - Conduct of any examination by an educational Institute includes both pre examination works, actual conduct of the exams and post-examination works. Hence for reasons mentioned in para no. 5.4 above we hold that such supply is also a supply of services and classifiable under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 122017 - Central Tax (Rate), dated 28 th June, 2017 as amended. We do not agree with the jurisdictional officer who has opined that the said supply is a supply of goods and not services. What would be the classification and the GST rate, for the supply of services in the nature of printing of Railway Tickets where (i) the physical inputs of paper belongs to the applicant and (ii) the physical inputs of paper belongs to the Railways? - HELD THAT - GST is applicable to all the supplies of goods and services made through the railways, including passenger tickets, commercial transports and catering services. The applicant is claiming exemption on its supply considering the same as Railway Tickets . In a situation where the applicant does printing for Railway Tickets and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under Heading 9989 of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 as amended which covers Services by way of printing of all goods falling under Chapter 48 or 49 including newspapers, books physical inputs (including Braille books), journals (goods) owned and periodicals , which attract by others) CGST@ 6 per cent., or 2.5% per cent, or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printed and is taxable at 12% GST - In a situation where the applicant does printing for Railway Tickets and uses physical input i.e. paper supplied by the Railways then the same will be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (iia) i.e. Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST@ 6% . What would be the classification and the GST rate, for the supply of services in the nature of printing of cheques for their clients (i) the physical inputs of paper belongs to the applicant and (ii) the physical inputs of paper belongs to the concerned Banks? - HELD THAT - The cheques, lose or in book form, are covered under Chapter Heading 4907 00 90 and are subject to Nil rate vide Notification No. 2/2017-C.T. (Rate) dated 28.06.2017 - In a situation where the applicant does printing of cheques and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under under Heading 9989 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017. In a situation where the applicant does printing of cheques where physical input i.e. paper is supplied by the client, then the same will also be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (ii) (c) i.e. Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST@ 2.5% or Nil and will be taxable @ 2.5% CGST.
Issues Involved:
1. Whether the supply of service of printing pre-examination items like question papers, OMR sheets, answer booklets, and post-examination items like marks card, grade card, certificates to educational boards up to higher secondary is exempted under GST. 2. Classification and applicable GST rate for the supply of printing of railway tickets. 3. Classification and applicable GST rate for the supply of printing of cheques. Analysis of Judgment: Issue 1: Printing Services for Educational Boards Pre-examination and Post-examination Items: The applicant, engaged in printing services for educational boards, contended that these services should be exempt under Entry No. 66 of Notification No. 12/2017 - Central Tax (Rate), dated 28th June 2017, as amended. The services include printing question papers, OMR sheets, answer booklets, marks cards, grade cards, and certificates. The applicant argued that these services are integral to the conduct of examinations and thus should be classified under Heading 9992 (Education Services) and exempt from GST. Authority's Decision: The Authority for Advance Ruling (AAR) agreed with the applicant, stating that the supply of pre-examination and post-examination items is essential for conducting examinations. These services fall under Heading 9992 and are exempt from GST under Entry No. 66 of Notification No. 12/2017 - Central Tax (Rate). The AAR emphasized that both pre and post-examination services are part of the examination process and thus qualify for exemption. Issue 2: Printing of Railway Tickets Applicant's Argument: The applicant provides printing services for railway tickets using either their own paper or paper supplied by Indian Railways. They argued that the printed railway tickets should be classified under Chapter Heading 4901 and be exempt from GST. Authority's Decision: The AAR held that railway tickets, after printing, are classified as products of the printing industry under Chapter 4907. When the applicant uses their own paper, the supply falls under Heading 9989 and is taxable at 12% GST. If the paper is supplied by Indian Railways, the service is classified under Heading 9988 and is taxable at 12% GST. The AAR clarified that the nature of the input material (whether supplied by the applicant or the Railways) determines the applicable GST rate. Issue 3: Printing of Cheques Applicant's Argument: The applicant prints cheques using either their own paper or paper supplied by banks. They contended that cheques should be classified under Chapter Heading 4907 and be exempt from GST. Authority's Decision: The AAR ruled that cheques, whether printed using the applicant's paper or paper supplied by banks, fall under Chapter Heading 4907 and are subject to Nil GST rate as per Notification No. 2/2017 - Central Tax (Rate). However, when the applicant uses their own paper, the service is classified under Heading 9989 and is taxable at 12% GST. If the paper is supplied by the banks, the service falls under Heading 9988 and is taxable at 5% GST. Conclusion: 1. The supply of pre-examination and post-examination printing services to educational boards is exempt from GST under Heading 9992. 2. The printing of railway tickets is taxable at 12% GST, regardless of whether the paper is supplied by the applicant or Indian Railways. 3. The printing of cheques is subject to Nil GST when classified under Chapter Heading 4907. However, if the applicant uses their own paper, the service is taxable at 12% GST under Heading 9989. If the paper is supplied by banks, the service is taxable at 5% GST under Heading 9988. Order: The questions were answered accordingly, affirming the exemption for educational printing services and specifying the applicable GST rates for printing railway tickets and cheques based on the source of the input materials.
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