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2020 (7) TMI 378 - AAR - GSTClassification of supply - supply of goods or not - transaction of printing of content provided by the customer, on poly Vinyl Chloride banners and supply of such printed trade advertisement material - classification of such trade advertisement material if the transaction is a supply of goods - Applicability of TRU Circular No. 11/11/2017-GST dated 20.10.2017. Whether the transaction of printing of content provided by the customer, on poly Vinyl Chloride banners and supply of such printed trade advertisement material is supply of goods? - HELD THAT - The applicant in the instant case takes up the supply of trade advertising material by procuring the required raw materials such as poly vinyl, flex, paper, cloth printing inks etc., all by themselves based on specification provided by the client in terms of design, size and material. In-fact, the applicant transfers the title in the goods i.e., printed material on flex to the customer - From the plain reading of Section 7 of CGST Act, 2017 read with Schedule - II Sl.No. 1(a) of CGST Act, 2017, it is obvious that the applicant is transferring the title in goods to his customers in the form of trade advertising material and it constitutes supply of goods only. Rate of tax - Classification of goods - HELD THAT - The trade advertising materials is classifiable vide Notification No.1/2017 - Central Tax (Rate) dt 28.06.2017 under S1.No.132 under HSN code 4911 and attracts tax rate of 12% - Further, the same has been clarified in detail vide the clarification issued under F.No.354/263/2017-TRU, Dt 20th October, 2017 in Circular No.11/11/2017-GST.
Issues Involved:
1. Whether the transaction of printing of content provided by the customer on poly Vinyl Chloride banners and supply of such printed trade advertisement material is a supply of goods. 2. Classification of such trade advertisement material if the transaction is a supply of goods. Issue-Wise Detailed Analysis: Issue 1: Supply of Goods The applicant, engaged in printing trade advertising material on PVC, flex, paper, and cloth based on client specifications, queries if this constitutes a supply of goods. The applicant procures raw materials, prints on them as per customer designs, and transfers the title of the printed material to the customer. As per Section 7 of the CGST Act, 2017 read with Schedule-II Sl.No. 1(a), "any transfer of the title in goods is a supply of goods." The applicant's transaction involves transferring the title in the printed material, thus constituting a supply of goods. Issue 2: Classification of Trade Advertisement Material The classification of the printed trade advertisement material falls under Notification No.1/2017 - Central Tax (Rate) dated 28.06.2017 under Sl.No.132, HSN code 4911, attracting a tax rate of 12% (CGST 6% + SGST 6%). This classification is supported by Circular No.11/11/2017-GST, which clarifies that printed materials made using physical inputs belonging to the printer are predominantly a supply of goods. Further, the consolidated FAQ under Sl.no 59 confirms that such items fall under HS code 4911 and attract 12% GST. Summary: The transaction of printing content provided by the customer on poly Vinyl Chloride banners and supplying such printed trade advertisement material constitutes a supply of goods as per Section 7 of the CGST Act, 2017. The classification of such trade advertisement material is under HSN code 4911, attracting a tax rate of 12% (CGST 6% + SGST 6%).
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