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2020 (3) TMI 69 - AAR - GSTClassification of supply - supply of goods or not - transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material - rate of GST. HELD THAT - In the instant case, it is an admitted fact that the PVC material is classified under Chapter 39 prior to printing and after printing it would become Trade Advertising Material falls under Chapter 49. Therefore the activity of printing makes the PVC material into Trade Advertising Material i.e. banner/billboard etc., and thus the nature of the material changes. Further the applicant does not own or retain the usage rights of intangible inputs. In view of the foregoing the activity of printing of the content, supplied by the recipient, on the PVC material becomes principal supply and such supply constitute supply of service falling under SAC 9989. The transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of service - The classification of aforesaid supply of service is 9989 of the scheme of classification of services - The applicable rate of GST on the supply of aforesaid service is 18% up to 30.10.2017 12% effective from 31.10.2017, as per Entry No.27 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended.
Issues:
1. Whether the transaction of printing of content provided by the customer on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of goods. 2. What is the classification of such trade advertisement material if the transaction is supply of goods? 3. What is the classification and applicable rate of CGST on the supply of such trade advertisement material if the transaction is that of supply of service? Analysis: Issue 1: The applicant argued that their supply of printed trade advertising material constitutes the supply of goods under Section 2(52) of the CGST Act 2017 as the material is movable and the title is transferred. They also claimed it to be a composite supply with goods as the principal supply under Section 8 of the CGST Act 2017. The applicant referred to Circular No. 11/11/2017-GST to support their position. Issue 2: The applicant contended that the trade advertisement material should be classified under heading 4911 of CTA 1975, taxable at 12% as per Notification No.01/2017-Central Tax (Rate) dated 28.06.2017. Even if considered a composite supply, they argued that the principal supply is goods, attracting GST at the same rate. Issue 3: During the personal hearing, the applicant reiterated their arguments. The Authority considered the submissions and the relevant facts. They referred to Circular No. 11/11/2017-GST to determine if the supply is of goods or services. The Circular clarified the classification based on the ownership of intangible inputs and physical inputs used for printing. The Authority analyzed the circular's provisions regarding the printing of various materials and concluded that the supply of printed trade advertisement material is a supply of service under SAC 9989. The applicable rate of GST was determined to be 18% up to 30.10.2017 and 12% effective from 31.10.2017 as per Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. In conclusion, the Authority ruled that the transaction of printing and supplying trade advertisement material is a supply of service classified under SAC 9989, with an applicable GST rate of 18% up to 30.10.2017 and 12% thereafter.
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