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2021 (8) TMI 537 - AAR - GSTScope of supply - supply of goods or supply of services - printing text books for supply by the State Government to its allied educational institutions - printing of Lottery tickets for vending by the State Government to the general public - printing of stationery items like calendars, Diaries etc for supply by the State Government to its offices and other institutions - ''Governmental Authority or a Government Entity as defined under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended or not - eligibility for exemption from levy of GST under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended - liable to be registered under GST or not - person required to deduct TDS, applicant or their customer, Kerala Government. HELD THAT - The taxable event in GST is the supply of goods or services or both. The term supply has been inclusively defined under Section 7 of the CGST Act and accordingly any transaction involving goods and / or services made for a consideration in the course or furtherance of business will come under the scope and meaning of supply unless it is listed under Schedule III or notified by Government on recommendations of the Council to be treated neither as a supply of goods nor services. From the facts as stated in the application, the activities / transactions undertaken by the applicant squarely fall within the scope and meaning of supply as defined in clause (a) of sub-section (1) of Section 7 of the CGST Act and the activities / transactions is neither specified in Schedule III nor notified in terms of clause (b) of sub-section (2) of Section 7 of the CGST Act. Therefore, the activities / transactions performed by the applicant constitute supply as defined in Section 7 of the CGST Act and accordingly are liable to GST unless specifically exempted by notification. Whether it constitutes a supply of goods or a supply of services? - HELD THAT - Admittedly, the applicant is engaged in printing of textbooks, lottery tickets and stationery items like Diary and Calendars etc for the State Government and the entire content and its features that are to be printed are designed and given by the State Government. They only arrange the paper and print the said content on the paper. They do not own the usage rights to the said content given to them. The CBIC in Para 4 of Circular No. 11/11/2017 GST dated 20.10.2017 has clarified that in the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing of the content supplied by the recipient of supply is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services, which pertains to other manufacturing services; publishing, printing and reproduction services; material recovery services. The activities performed by the applicant is a supply of services falling under Heading -9989 - Other manufacturing services; publishing, printing and reproduction services; material recovery services - 998912 - Printing and reproduction services of recorded media, on a fee or contract basis and attracts GST at the rate of 12% as per the respective description of the entries at item nos. (i) and (ii) of Si No. 27 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended. Whether the applicant is a Governmental Authority or a Government Entity as defined in the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended? - HELD THAT - The applicant was established by the State Government for the purpose of printing school text books, which is an integral part of the function of Education including primary and secondary schools entrusted to a Panchayat under Article 243G as per entry at S1 No. 17 of 11th Schedule of the Constitution and also the function of Promotion of cultural, educational and aesthetic aspects entrusted to a Municipality under Article 243W as per entry at S1 No. 13 of 12th Schedule of the Constitution. Further, from the constitution of the governing body of the applicant it is evident that the applicant is fully owned and controlled by the State Government. Hence, the second condition prescribed in the above definition is also satisfied - the applicant is a Governmental Authority as defined in Para 2 (zf) of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. Since it is concluded that the applicant is a Governmental Authority we do not consider it necessary to examine whether the applicant is a Government Entity as it is not relevant for answering the questions raised in the application. Whether the services supplied by the applicant is exempted as per entries at Si Nos. 3, 4 or 5 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended? - HELD THAT - The services of printing of text books is integral to the function of Education- including primary and secondary schools entrusted to a Panchayat under Article 243G as per entry at Sl. No. 17 of 11th Schedule of the Constitution. Therefore, the service of printing of textbooks supplied by the applicant to the State Government is exempted as per entry at Si No. 3 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended, being pure service provided to the State Government by way of an activity in relation to a function entrusted to a Panchayat under Article 243G of the Constitution. Service of printing of lottery tickets to the State Government - HELD THAT - The service of printing of Text Books supplied by the applicant to the State Government is exempted from GST as per entry at Sl No. 3 of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended. The service of printing of Lottery tickets supplied by the applicant to the State Government is liable to GST at the rate of 18% as per entry at item (ii) of Sl No. 27 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended - The service of printing of Diary and other stationery articles supplied by the applicant to the State Government is liable to GST at the rate of 18% as per entry at item (ii) of Sl No. 27 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended - The service of printing of Calendar supplied by the applicant to the State Government is liable to GST at the rate of 12% as per entry at item (i) of Sl No. 27 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended. Liability of applicant or liability of the Government of Kerala to deduct TDS on the supplies made by them - applicability of Section 51 of the CGST Act - HELD THAT - The provisions of the CGST Act governing advance ruling does not provide for an applicant to seek a ruling regarding the applicability of the provisions of the Act or the notification issued there under to a third person other than the applicant. Hence, no ruling can be issued by this authority on the applicability of the provisions of Section 51 of the CGST Act to the Government of Kerala.
Issues Involved:
1. Whether the activities fall within the ambit of "supply" under GST. 2. Classification of the activities as supply of goods or services. 3. Qualification as a "Governmental Authority" or "Government Entity." 4. Eligibility for GST exemption under Notification No. 12/2017. 5. Liability to deduct TDS under GST provisions. Issue-wise Detailed Analysis: 1. Whether the activities fall within the ambit of "supply" under GST: The Authority examined Section 7 of the CGST Act, which defines "supply" as including all forms of supply of goods or services made for consideration in the course or furtherance of business. The activities of printing textbooks, lottery tickets, and stationery items by the applicant were found to fall within this definition. The activities are neither specified in Schedule III nor notified under Section 7(2)(b) to be treated neither as a supply of goods nor services. Therefore, these activities constitute "supply" under GST. 2. Classification of the activities as supply of goods or services: The applicant's activities are classified as supply of services. The CBIC Circular No. 11/11/2017 GST clarifies that printing services where the content is supplied by the recipient and the physical inputs belong to the printer constitute supply of services. The applicant's activities fall under Heading 9989 - Other manufacturing services; publishing, printing and reproduction services; material recovery services - 998912 - Printing and reproduction services of recorded media, on a fee or contract basis, attracting GST at 12% or 18% depending on the specific item. 3. Qualification as a "Governmental Authority" or "Government Entity": The applicant qualifies as a "Governmental Authority" as defined in Para 2(zf) of Notification No. 12/2017. The applicant was established by the State Government with 100% control and ownership, and its activities of printing textbooks are integral to the function of education entrusted to Panchayats under Article 243G and to Municipalities under Article 243W of the Constitution. Therefore, the applicant meets the criteria of a "Governmental Authority." 4. Eligibility for GST exemption under Notification No. 12/2017: - Printing of Textbooks: Exempted from GST under entry at Sl. No. 3 of Notification No. 12/2017 as it is a pure service provided to the State Government in relation to a function entrusted to a Panchayat under Article 243G. - Printing of Lottery Tickets: Not exempted as the activity of conducting lotteries does not relate to poverty alleviation or other functions under Articles 243G or 243W. - Printing of Stationery Items (Diaries, Calendars): Not exempted as these activities do not relate to any function entrusted to Panchayats or Municipalities under Articles 243G or 243W. 5. Liability to deduct TDS under GST provisions: The Authority cannot issue a ruling on the liability of the applicant or the Government of Kerala to deduct TDS under Section 51 of the CGST Act. The provisions of advance ruling do not allow for a ruling on the applicability of the Act to third parties or on matters not specified in Section 97(2) of the CGST Act. RULING: a. All activities (printing textbooks, lottery tickets, stationery items) constitute supply under GST and fall under Heading 9989 as supply of services. b. Printing of Textbooks is exempt from GST under Notification No. 12/2017. Printing of Lottery Tickets and Stationery Items is not exempt. c. The question of GST registration is not relevant based on the above answers. d. No ruling on TDS applicability can be issued for the reasons stated.
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