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2019 (12) TMI 1118 - AAR - GSTClassification of supply - procurement of advertisements for the Directory - bundles services or intermediary services or mixed supply - whether classifiable as selling of space for advertisement in print media? - applicability of SI No. 21 (i) of N/N. 11/2017 - CT (Rate) dated 28/06/2017 (corresponding State N/N. 1135FT dated 28/06/2017), as amended from time to time. HELD THAT - Selling of space for advertisement, when made as an intermediary, is classifiable under SAC 998362, which excludes sale of advertising space in print media (SAC 998363) and is taxable @ 18% under SI No. 21 (ii) of the Rate Notification - Service by way of printing (SAC 998912) of all goods falling under Chapter 48 or 49 of the First Schedule of the Customs Tariff Act, 1975 (where the physical inputs are supplied by the printer) is taxable @ 12% under SI No. 27 (i) of the Rate Notification. The mixed supply of the Applicant should, therefore, be treated taxable under SI No. 21 (ii) of the Rate Notification. The Applicant is making a mixed supply to the Tollygunge Club of printing service (SAC 998912) and intermediary service for selling space for advertisement on behalf of the club (SAC 998362). It shall be treated as supply of the above intermediary service taxable @ 18% under SI No. 21 (ii) of Notification No. 11/2017 - CT (Rate) dated 28/06/2017 (corresponding State Notification No. 1135FT dated 28/06/2017), as amended from time to time.
Issues:
1. Admissibility of the Application 2. Classification of the Applicant's procurement of advertisements 3. Determination of the nature of the Applicant's supply 4. Taxability of the mixed supply made by the Applicant Admissibility of the Application: The Applicant sought a ruling on whether its procurement of advertisements for the Directory is classifiable as selling space for advertisement in print media. The Applicant's supply, acting as an intermediary for procuring advertisements, was considered admissible for an advance ruling under section 97(2) (a) & (b) of the GST Act. The Application was admitted as the issue raised was not pending or decided in any proceedings under the GST Act, and no objection was raised by the revenue officer. Classification of the Applicant's procurement of advertisements: The Applicant contended that the Directory, meant for non-commercial purposes, falls under print media as defined in the relevant notification. The Revenue, however, argued that the Applicant's services go beyond mere advertisement space sales. The Authority noted the obligation of the Applicant to finance the project cost based on advertisement proceeds and ruled that the Applicant's supply was not a composite supply but a mixed supply. Determination of the nature of the Applicant's supply: The Applicant was found to be making a bundled supply of printing service and intermediary service for selling advertisement space to the Club. This bundled supply, not naturally bundled, was treated as a mixed supply under the GST Act. The Applicant's service of selling space for advertisement was classified under a specific SAC, taxable at 18% under the relevant Rate Notification. Taxability of the mixed supply made by the Applicant: The Authority ruled that the Applicant's mixed supply to the Club should be treated as the supply of intermediary service taxable at 18%. It clarified that the Club's supply of selling advertisement space was not considered in the ruling due to the limitation under section 95 to supplies made or intended to be made by the Applicant. The ruling was declared valid subject to the provisions of the GST Act. In conclusion, the judgment addressed the admissibility of the application, the classification of the Applicant's services, the nature of the supply made, and the taxability of the mixed supply, providing detailed analysis and clarification on each issue raised by the Applicant.
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