2018 (12) TMI 1227 - AAR - GST

Classification of supply - supply of goods or supply of services? - export of services or not - activities undertaken by procuring orders from a foreign party to print religious texts and thereafter deliver them to various places in India - Held that - The Applicant is supplying the service of printing the Bible (the purchase orders and the tax invoice refer to supplying of printing service classifiable under heading 9989) to the recipient located in India - also, the Applicant s supply is not the export of service, as the recipient of the service is located in India. It violates clause (b) of section 2(6) of the IGST Act. Furthermore, both the purchase orders and the tax invoice are in INR. Although the Applicant argues that the consideration is being received in US dollars, he has not clarified nor produced any evidence of how payment for purchase orders in INR and tax invoice raised in INR are made in foreign currency. It raises doubt about violation of condition under clause (d) of Section 2(6) of the IGST Act as well - The Applicant is making domestic supplies, on which he is liable to pay GST. Ruling - The Applicant s activity of printing the Bible under the specific orders received from The Gideons International is a supply of service classifiable under SAC 9989. The service is supplied to the recipient located in India and the consideration is apparently received in INR. The Applicant is, therefore, liable to pay GST under the appropriate Act on such supplies.

Summary

Issues: Classification of activity as "supply of goods" or "supply of services" and determination of "export" status.

Classification as "supply of goods" or "supply of services":
The Applicant, engaged in printing, sought a ruling on whether procuring orders from a foreign party to print religious texts and deliver them in India constitutes "supply of goods" or "supply of services." The Authority admitted the ruling under section 97(2)(a) of the GST Act. The Applicant's activity was analyzed in light of TRU Clarification, which categorized similar activities as "supply of services" under heading 9989, liable to GST at 12%. The Applicant's role was deemed as providing a composite supply, with printing being the principal supply. The Authority concluded that the Applicant's activity falls under "supply of services" and is subject to GST.

Determination of "export" status:
Although the Applicant's activity could not be ruled as an "export" under the IGST Act due to the recipient being in India, the Applicant claimed consideration in US dollars. However, as purchase orders and invoices were in INR, doubts arose regarding foreign currency payment. This raised concerns about violating conditions under the IGST Act. Consequently, the Applicant's supply was deemed as domestic, making them liable to pay GST. The ruling stated that the Applicant's service of printing Bibles for the foreign customer is classified as a supply of service under SAC 9989, supplied to a recipient in India, and subject to GST in INR.

Conclusion:
The ruling clarified that the Applicant's printing activity for the foreign customer constituted a supply of service under SAC 9989, supplied to a recipient in India, thus attracting GST liability. The decision remains valid unless declared void under the GST Act.