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2020 (3) TMI 411 - AAR - GSTNature of transaction - taxable transaction or not - Place of supply - whether the activities undertaken by procuring orders from a foreign buyer to print texts and thereafter deliver them to various places in India is a taxable transaction? HELD THAT - Services by way of printing of the goods falling under Chapter 48 and 49 are classifiable under SAC 9989. The goods supplied, having no use other than displaying the printed matter, is ancillary to the principal supply of printing. At the same time, being a composite supply, the printing service is inseparable from supply of the goods, namely the printed booklets. The place of supply of the printed booklets will, therefore, be the place of supply of the printing service. In other words, the place at which the printed booklets are delivered is the place of supply of the composite printing service. The Applicant supplies the composite printing service to the recipient located in India. Such supplies are not, therefore, export of services within the meaning of section 2(6) of the IGST Act, 2017. It is taxable under SI No. 27(i) of Notification No. 11/2017 - CT (Rate) dated 28/06/2017 (corresponding State Notification No. 1135 - FT dated 28/06/2017) or SI No. 27 of Notification No. 8/2017 - IT (Rate) dated 28/06/2017, as the case may be.
Issues: Admissibility of the Application, Submission of the Applicant, Observations & Findings of the Authority
Admissibility of the Application: The Applicant, engaged in printing, seeks a ruling on the taxability of procuring orders from a foreign buyer to print texts and deliver them in India. The ruling is admissible under section 97(2)(e) of the GST Act as the question is not decided by any authority. The Application is admitted. Submission of the Applicant: The Applicant receives a contract from a US entity to print booklets in Indian languages, arguing that the recipient, defined in the GST Act, is the person liable to pay consideration. The Applicant asserts that the place of delivery is irrelevant as the foreign buyer pays in US dollars. They claim the activity constitutes an export of service under section 13(2) of the IGST Act, 2017. Observations & Findings of the Authority: The CBIC clarifies that printing contracts differ based on utility, with printing of books being service-oriented. The Applicant's supplies are classified under heading 4901 of the Tariff Act, and the printing service is the predominant element. The place of supply is where the booklets are delivered, making it taxable under specific notifications. In conclusion, the Authority rules that the Applicant's composite printing service is taxable under specific notifications of the GST Act. The ruling remains valid unless declared void under relevant provisions. The Applicant's argument on the recipient's location and consideration payment is refuted, emphasizing the exhaustive definition of 'recipient' under the GST Act. The ruling clarifies the taxability of the Applicant's services based on the nature of the supplies and the place of delivery, ensuring compliance with the GST regulations.
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