2018 (10) TMI 309 - AAR - GST

Classification - services or goods? - Determination of SAC or HSN? - Service of printing Question Papers for Educational Institutions - Service to such Educational Institutions relating to conduct of examination - Levy of GST - Rate of GST - input tax credit. Whether the Question Papers supplied by the Applicant are goods or services ? - Held that - As stated in the Application and in the arguments of the Applicant at the time of Personal Hearing the content of the matter printed referred to above, is being provided to the Applicant, and to print the same, i.e to convert the matter into a tangible form, necessary raw material, manpower and machinery is being provided by the Applicant. In other words, the content of the printed matter is specific to the customer, and, neither is the matter pre-printed, nor has the Applicant any ownership to the content at any point of time, and, therefore, cannot transfer title of the above printed matters. In other words, Question Papers are not the property of the Applicant - Furthermore, the Question Papers supplied by the Applicant to their customers are not marketable commodities in the open market and as goods they have no legitimate value to persons other than the specific customer who provides the input content. The Applicant, therefore, cannot be said to be supplying Question Papers as goods under the GST Act, but to be supplying the service of printing - Hence, the SAC is to be determined and not the HSN - Section 9 of the GST Tariff-Services deals with Community, Social and Personal Services and other miscellaneous services which include Education Services (covering services related to admission to or conduct of examination by Educational Institutions) under Heading 9992. Since the Applicant has specified the printing of question papers for Educational Institutions, supply of service under Section 9 of the GST Tariff is found to be appropriate. Benefit of exemption - Held that - Serial No. 66(b)(iv) of Notification No. 12/2017 CT(Rate) dated 28/06/2017, as amended from time to time, as applicable, wholly exempts services provided to an Educational Institution relating to conduct of examination. The phrase relating to expands the scope of this entry to include such support services without which conduct of the examination is not possible, unless they are specifically mentioned under any other entry. Question papers can have no use other than in conducting a specific examination, and the supply of service of printing such question papers is a supply related to conduct of that examination - Explanation (iv) to Notification No. 12/2017-CT (Rate) dated 28/06/2017, inserted vide Notification No. 14/2018-CT(Rate) dated 26/07/2018, clarifies that the Central and State Educational Boards shall be treated as Educational Institution for the limited purpose of services by way of conducting examinations. Serial No. 66(b)(iv) above, therefore, includes services provided to such Boards relating to the conduct of examinations - The Applicant is, therefore, not liable to pay tax on the service of printing question papers provided to the Educational Boards/Councils/Universities/Institutions relating to the conduct of examination. Section 17(2) of GST Act states that Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. - Since the supply of Question Papers to Educational Institutions if provided, for a particular examination is an exempt supply under Serial No. 66(b)(iv) of Notification No. 12/2017-CT (Rate) dated 28/06/2017, as amended, as applicable, the Applicant is not eligible to avail of Input Tax Credit. Ruling - Service of printing Question Papers for Educational Institutions as defined under clause 2(y) read with Explanation (iv) to Notification No. 12/2017-CT (Rate) dated 28/06/2017 for specific examination is classifiable under SAC 9992. Service to such Educational Institutions relating to conduct of examination, as described in 66(b)(iv) of Notification No.12/2017-CT(Rate) dated 28/06/2017, includes supply of the service of printing question papers, and is exempt under the GST Act. Being an exempt supply, the Applicant cannot claim credit of the GST paid on the inputs used for provisioning the service of printing question papers provided to the Boards / Educational Institutions relating to conduct of examination. This Ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 104(1) of the GST Act.

Summary

Issues:
1. Whether GST is applicable on the supply of printed question papers for examinations conducted by educational institutions?
2. If GST is applicable, at what rate should it be charged and under what HSN or SAC code?
3. Whether credit of GST paid on inputs used for the supply can be availed?

Analysis:
1. The Applicant sought a ruling on the applicability of GST on supplying printed question papers for various examinations conducted by educational institutions. The Applicant also inquired about the rate of GST to be charged and the relevant HSN or SAC code. The Authority admitted the application for advance ruling under Sections 97(2)(a),(d)&(e) of the CGST/WBGST Acts, 2017.

2. The Applicant is registered under HSN 4901 under GST and provides printing services for question papers to educational institutions. The Applicant's customers, being government organizations, do not pay GST on the services, leading to the inability to claim credit on GST paid for inputs. The nature of the services provided and the ownership of the printed question papers were discussed.

3. The judgment focused on determining whether the printed question papers are considered as "goods" or "services" under the GST Act. The definition of goods and services under Section 2 of the Act was analyzed to ascertain the classification. The ruling emphasized the distinction between goods and services in the context of supplying printed question papers.

4. Section 7 of the GST Act outlines the conditions for the scope of supply for goods and services. The applicability of Schedule III and government notifications in determining the classification of supply was discussed. The absence of specific notifications regarding the supply of question papers was highlighted.

5. The ruling clarified that the supply of question papers does not fall under the category of goods as per the GST Act. The nature of the transaction and the ownership of the content were considered to determine the classification as a service of printing rather than a supply of goods.

6. The Applicant's procurement of inputs for printing question papers and the specific requirements set by educational boards were examined. The classification of printing services under the GST Tariff-Services was discussed, emphasizing the applicability of relevant notifications for taxation.

7. The judgment referred to Sections 8 and 9 of the GST Tariff-Services to determine the appropriate classification for the printing services provided to educational institutions. The taxability of services related to the conduct of examinations was analyzed under specific headings.

8. The GST rates for services, including exemptions, were governed by relevant notifications. The exemption for services provided to educational institutions related to the conduct of examinations was elaborated, citing specific entries and explanations from the notifications.

9. The ruling concluded that the Applicant is not liable to pay tax on the service of printing question papers for educational institutions conducting examinations. The eligibility for input tax credit was discussed in relation to exempt supplies under the GST Act, highlighting the restrictions on availing credit.

10. The final ruling classified the service of printing question papers for educational institutions under a specific SAC code and confirmed the exemption from GST under the relevant notification. The Applicant was deemed ineligible for claiming credit on GST paid for inputs used in the provision of printing services to educational institutions.