2023 (1) TMI 435 - AAAR - GST

Classification of goods - rate of GST - Jursdiction of AAR - Question was asked about CGST Act - AAR answered the same as per CGST and IGST act - educational institution or not - printing of Pre examination items like question papers, OMR sheets (Optical Mark Reading), Answer booklets for conducting of an examination by the educational boards - 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 in relation to conduct of an examination - scanning and processing of results of examinations be treated as exempted supply of service - Exempt supply as per Serial Number 66 of Notification No. 12/2017-CGST Rate dated 28-6-2017 as amended or not. HELD THAT - The Intra-State supplies made by M/s. Universal Print Systems that is providing/intending to provide services of printing of examination material to the educational institutions are exempted vide entry 66 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, as amended. Inter-State supplies made by M/ s. Universal Print Systems that is providing/intending to provide services of printing of examination material to the educational institutions are actually not covered under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended, as the said Notification is issued under CGST Act and is having limited jurisdiction over intra-state supplies only. However, a similar and equivalent exemption is available to Inter State Supplies vide entry 69 of Notification No.9/2017-Integrated Tax (Rate) dated 28.06.2017, as amended. It is observed from the original application for Advance Ruling made by the 'Appellant', that the appellant despite mentioning both Intra-state (supplies within the state of AP) and Inter-state (supplies to other side states than AP i.e. to Telangana and Kerala) supplies, sought Advance Ruling on 'availability of exemption benefit under Notification No.12/2017-CGST Dated 28.06.2017'. This being the case, The Ruling passed by the Advance Ruling Authority, on applicability of a Notification without discussing the jurisdiction of being the case, The Ruling passed by the Advance Ruling Authority, on applicability of a Notification without discussing the jurisdiction of the said Notification, appears to be stretched beyond the legal boundary.

Summary

Issues Involved:
1. Classification of printing services for pre-examination items.
2. Classification of printing services for post-examination items.
3. Classification of scanning and processing examination results.
4. Applicability of exemptions under Notification No. 12/2017-CGST (Rate) dated 28-6-2017.
5. Jurisdictional applicability of CGST and IGST notifications.

Detailed Analysis:

1. Classification of Printing Services for Pre-examination Items:
The issue concerns whether the printing of pre-examination items like question papers, OMR sheets, and answer booklets for educational boards qualifies as an exempted supply of service under Serial Number 66 of Notification No. 12/2017-CGST (Rate) dated 28-6-2017. The Authority for Advance Ruling (AAR) initially ruled affirmatively, classifying these services as exempt. The Appellate Authority upheld this ruling, confirming that such services fall within the ambit of the specified notification, as they are integral to the conduct of examinations by educational institutions.

2. Classification of Printing Services for Post-examination Items:
This issue pertains to whether the printing of post-examination items like marks cards, grade cards, and certificates, after scanning OMR sheets and processing data, is an exempted supply of service under the same notification. The AAR affirmed this classification, and the Appellate Authority agreed, noting that these services are also related to the conduct of examinations and thus qualify for exemption under the specified notification.

3. Classification of Scanning and Processing Examination Results:
The question here is whether the scanning and processing of examination results are considered exempted services under the same notification. The AAR ruled affirmatively, treating these services as exempt. The Appellate Authority upheld this decision, emphasizing that these services are essential to the examination process and fall within the scope of the notification.

4. Applicability of Exemptions under Notification No. 12/2017-CGST (Rate) Dated 28-6-2017:
The appellant challenged the AAR's ruling on the grounds that the notification No. 12/2017-CGST (Rate) applies only to intra-state supplies. The Appellate Authority clarified that while the notification indeed pertains to intra-state supplies, a similar exemption is available for inter-state supplies under Notification No. 9/2017-Integrated Tax (Rate) dated 28-6-2017. Therefore, the services provided by M/s. Universal Print Systems to educational institutions in other states also qualify for exemption under the corresponding IGST notification.

5. Jurisdictional Applicability of CGST and IGST Notifications:
The appellant argued that the AAR's ruling extended beyond its jurisdiction by addressing inter-state supplies under a CGST notification. The Appellate Authority acknowledged this oversight but rectified it by referencing the appropriate IGST notification. It concluded that both intra-state and inter-state supplies of printing services related to examinations are exempt under their respective notifications, ensuring compliance with jurisdictional boundaries.

Conclusion:
The Appellate Authority modified the AAR's order, holding that the services rendered by M/s. Universal Print Systems to educational institutions concerning examination-related products fall within the exemption criteria of entry 66 of Notification No. 12/2017-CGST (Rate) dated 28-6-2017 for intra-state supplies and entry 69 of Notification No. 9/2017-Integrated Tax (Rate) dated 28-6-2017 for inter-state supplies.