2024 (1) TMI 1095 - AAR - GST

Scope of supply - supply of goods or services in terms of the Circular 11/11/2017 dated 20.10.2017 - printing activities undertaken by them are eligible for exemption under Serial No. 3,3A of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended - HELD THAT - The process of conducting examination includes pre-examination works, the examination itself and post-examination works and for that purpose, printing of comprehensive report progress card may be treated as services relating to conduct of examination. However, in the instant case, the supply is provided to Education Department, Government of Assam and not to an educational institution - the instant supply shall not be covered under the aforesaid entry for exemption. Supply of notebooks - HELD THAT - The applicant has been awarded a contract by Jharkhand Education Project Council for printing/supply of 80 pages notebooks (including cover) for the academic session 2023-24. The notebooks are meant for free distribution among the children under School Kit Scheme of State Government. The acceptance letter issued by JEPC speaks that the multicolour matter for printing on inner and front cover pages of the notebooks will be provided at the time of work order in soft copies. On due consideration of the nature of contract, in the instant supply, predominant supply is that of goods and the supply of printing of the content supplied by the recipient of supply is ancillary to the principal supply of goods and therefore such supplies would constitute supply of goods falling under respective headings of Chapter 48 or 49 of the Customs Tariff. Whether the printing activities undertaken by the applicant are eligible for exemption under Serial No. 3/3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended? - HELD THAT - The term pure services has not been defined under the Act. However, a bare reading of the description of services as specified in serial number 3 above denotes that supply of services which does not involve any supply of goods can be regarded as pure services. The said entry serial, therefore, specifically excludes works contract services or other composite supplies involving supply of any goods - to qualify to be a supply under serial number 3A, a composite supply, subject to fulfilment of other conditions as specified in the said entry, would be such that the maximum value of involvement of goods is less than 25% of the total value of the said composite supply. As the supplies of printed text books, notebooks, activity calendar and comprehensive progress report card involves supply of paper, ink, binding and packing materials etc., such supplies would not come under serial number 3 of the notification supra. Further, the applicant has not furnished any documents wherefrom the value of goods involved in the supply can be ascertained.

Summary

Issues Involved:
1. Classification of items supplied as goods or services.
2. Eligibility for exemption under Notification No. 12/2017 Central Tax (Rate).

Issue 1: Classification of Items Supplied as Goods or Services

Textbooks to JCERT:
The applicant, engaged in printing books, supplies textbooks to JCERT. The contract involves a temporary transfer of copyright for which the applicant pays royalty. The Authority observed that the applicant holds the copyright and prints the books using its own materials. Thus, the supply is classified as "supply of goods."

Bilingual Parental Calendar to JEPC:
The applicant supplies a calendar that includes educational content and activities. The Authority determined that the calendar remains a calendar despite its educational content. As the recipient provides the content and the applicant undertakes the printing, it constitutes a composite supply with printing services as the principal supply. Hence, it is classified as "supply of services."

Notebooks to JCERT:
The applicant supplies notebooks featuring designs and logos of the Jharkhand Government. The contract is for printing and supplying notebooks for free distribution under the School Kit Scheme. The Authority held that the predominant supply is of goods, with printing being ancillary. Therefore, it is classified as "supply of goods."

Comprehensive Report Progress Card to Assam Government:
The applicant prints progress report cards for the Assam Government. Unlike the textbooks, there is no temporary transfer of copyright. The Authority concluded that this supply relates to the conduct of examinations and is classified as "supply of services."

Issue 2: Eligibility for Exemption under Notification No. 12/2017 Central Tax (Rate)

Pure Services (Serial No. 3):
The term "pure services" excludes works contract services or composite supplies involving goods. Since the supplies involve materials like paper and ink, they do not qualify under this entry.

Composite Supplies (Serial No. 3A):
For composite supplies to qualify under this entry, the value of goods must be less than 25% of the total value. The applicant did not provide documents to ascertain this value. Therefore, no ruling was given on this issue.

Ruling:
1. Printing and supply of textbooks to JCERT: Supply of goods.
2. Printing and supply of Bilingual Parental Calendar to JEPC: Supply of services.
3. Printing and supply of notebooks: Supply of goods.
4. Printing and supply of Comprehensive Report Progress Card to Assam Government: Supply of services.