2019 (5) TMI 903 - AAR - GST

Classification of services - printing work carried out by the applicant - whether printing work carried out by the applicant with the photo quality perfection comes within the purview of service of printing of pictures as covered under Circular No. 84/03/2019 - GST dated 01.01.2019? - HELD THAT - As per Circular No. 84/03/2019 - GST dated 01.01.2019, it is clarified that service of printing pictures falls under service code 998386 - Photographic and Videographic processing Services and not under 998912 Printing and Reproduction Services of recorded media, on a fee or contract basis. The word other printing services used in the service classification code 998912 has limited application like printing on newspaper, book printing or printing on media of plastic, glass, metal, wood, ceramic etc. The technological difference between ordinary print with digital print is in the way the images get transferred onto the paper. As per the explanatory notes to the scheme of classification of services, the printing of pictures / images on glossy coated paper / photo paper will not come under the Service Classification Code 998912 as it is specifically excluded from the classification and included in the Service Classification Code 998386. Therefore, the work of printing of images from digital media executed by the applicant comes within the ambit of Service Classification Code 998386 as the colour printing of images from digital media is specifically covered under this classification. Thus, the colour printing of images from digital media is under Service Classification Code 998386 and taxable at the rate of 18%.

Summary

Issues:
1. Classification of printing work under GST service codes.

Analysis:
The case involved M/s. Colortone Process Pvt. Ltd., engaged in high-quality digital printing services where customers provide content for printing. The applicant sought clarification on whether their printing work falls under "printing of pictures" as per a specific GST circular. The applicant argued that despite achieving photo quality prints, they were not engaged in photographic services. The applicant highlighted their diverse printing services, emphasizing that they solely print customer-provided content using advanced digital technology.

Upon detailed examination, it was found that the applicant's services encompassed printing various materials like letterheads, posters, certificates, and more, solely based on customer-supplied content. The key question was whether the applicant's printing work, particularly with photo quality, could be classified as "printing of pictures" under the relevant GST circular. The Service Classification Code 998912 covers printing and reproduction services of recorded media, including various printing-related activities like bookbinding, composition, and digital data preparation.

On the other hand, Service Classification Code 998386 pertains to photographic and videographic processing services, explicitly including color printing of images from film or digital media. The distinction was made clear that color printing of images from digital media falls under 998386, not 998912. The technological difference between ordinary and digital prints was highlighted, emphasizing the quality difference based on the paper used, with glossy coated paper providing superior print quality.

The ruling issued clarified that the applicant's work of printing images from digital media falls under Service Classification Code 998386, subject to an 18% tax rate. This decision was based on the specific exclusion of color printing of images from digital media under 998912 and its inclusion under 998386. The judgment emphasized the importance of understanding the nuances of service classification codes to determine the correct tax treatment for specific services.