2023 (6) TMI 984 - AAR - GST

Exemption from GST - Composite supply - Supply of services to educational institution - supply of printing services like question papers, OMR sheets, Answer sheets, marks card etc - serial no. 66(b)(iv) of Notification No. 12/2017 dt 28.06.2017 - HELD THAT - Not withstanding that the supply of papers is an integral part of the composite supply, without which the content of the test papers/question papers cannot be printed, but the same cannot be called as Principal supply as the purpose for which the educational institutes contracted with applicant is not for buying papers but for the printing services. The content to be printed is based on the specifications given by the educational institutes and the applicant has no role in deciding the same. Therefore supply of printing of the content supplied by the recipient of supply is the principal supply and the same is clarified by Circular No. 11/11/2017-GST dated 20.10.2017. Printing of test papers/question papers is the Principal supply of the composite supply and HSN classification of the entire supply should be done based on Principal supply. Supply of test papers/question papers would constitute supply of service falling under heading 9989 of the scheme of classification of services as the usage rights of the manuscript material of Question Papers/test papers (intangible inputs) are owned by the Educational Institutes and the physical inputs used for printing the same belong to the applicant. Applicability of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended vide clause (o) of Notification No. 2/2018-Central Tax(Rate) dated 25.01.2018, read with Sr. No. 27 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT - As per Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate), as amended, services provided to an educational institution, by way of services relating to admission to, or conduct of examination by, such institution is exempted from payment of Goods and Services Tax. It is to be noted that exemption is given only to services and not to goods in this Notification and the principal supply of the composite supply made by the applicant is printing services. The service of printing of question papers, if supplied by the applicant to other than educational institutions would attract Goods and service tax at rate as specified under Sr. No. 27(i) of Notification No. 11/2017-Central Tax (Rate), as amended, at rate of 12%.

Summary

Issues Involved:
1. Classification of services provided by the applicant.
2. Applicability of GST exemption under Notification No. 12/2017.

Summary:

Issue 1: Classification of Services Provided by the Applicant

The applicant, M/s. Y S Hitech Secure Print Private Limited, is engaged in security printing services for educational institutions, including question papers, OMR sheets, answer sheets, and certificates. The primary concern is whether these services are classified as supply of goods or services. The judgment clarifies that the supply of printed question papers and related materials is a composite supply where printing services are the principal supply. This classification is based on the fact that the educational institutions provide the content to be printed, and the applicant uses its own paper and ink for printing. Consequently, the services fall under Heading 9989 as per the scheme of classification of services.

Issue 2: Applicability of GST Exemption under Notification No. 12/2017

The applicant sought clarification on the applicability of the GST exemption for services provided to educational institutions under serial no. 66(b)(iv) of Notification No. 12/2017. The judgment references Circular No. 151/07/2021-GST, which clarifies that services related to the conduct of examinations, such as printing of question papers, are exempt from GST when provided to educational institutions. The exemption is applicable to services provided to educational institutions as defined in the notification, which includes institutions providing pre-school education, education up to higher secondary school, and education as part of a curriculum for obtaining a recognized qualification.

Ruling:

The Authority for Advance Ruling concluded that the supply of printing services, including test papers, OMR sheets, certificates, and other related materials, to educational institutions qualifies as a composite supply with printing services as the principal supply. As such, these services are exempt from GST under serial no. 66(b)(iv) of Notification No. 12/2017-CT(R).

Conclusion:

The supply of printing services to educational institutions, when using the applicant's own paper and ink, is considered a composite supply where printing services are the principal supply. These services are exempt from GST as per the relevant notification, provided they relate to the conduct of examinations by educational institutions.