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TMI Blog2019 (6) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of GST. Such services are exempted only if they are, in the subject case, related to conduct of examination by such institution. The question papers, OMR sheets (Optical Mark Reading), answer booklets are very essential and necessary requirements to conduct any examination. To print question papers the content i.e. the questions will be provided by the institution conducting the examination. The contents of the OMR sheets and answer sheets will also be provided accordingly by the institution - in the subject case there is a supply of services and since the same are provided to educational institutions, the same shall be classified under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 12/2017 - Central Tax (Rate), dated 28th June, 2017 as amended. Whether supply of service of Printing of Post examination items like marks card, grade card, certificates to educational boards (up to Higher Secondary) after scanning of OMR Sheets and processing of data are also exempted under the said Notification? - HELD THAT:- Conduct of any examination by an educational Institute includes both pre examination works, actual conduct of the exams ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in book form, are covered under Chapter Heading 4907 00 90 and are subject to Nil rate vide Notification No. 2/2017-C.T. (Rate) dated 28.06.2017 - In a situation where the applicant does printing of cheques and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under under Heading 9989 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017. In a situation where the applicant does printing of cheques where physical input i.e. paper is supplied by the client, then the same will also be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (ii) (c) i.e. Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST@ 2.5% or Nil and will be taxable @ 2.5% CGST. - GST-ARA-89/2018-19/B-23 - - - Dated:- 27-2-2019 - SHRI B. TIMOTHY, AND SHRI B.V. BORHADE, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: (1) Supply of services to the Educational Boards: a) Printing of Pre and Post Examination items for various Educational Boards: The Company provides the service of printing of both pre and post examination documents to various educational boards. The pre examination documents includes OMR sheets, question papers, answer booklets. The post examination documents include marks card, grade card and certificates. (ii) Printing of Railway Tickets for Indian Railways. The Company provides the services of printing of Railway Tickets to Indian Railways b) Physical inputs including paper and inks which are used for printing belong to the company itself; In the above scenarios, the company prints the Tickets and then supplies the tickets to the Indian Railways once the final output is ready. (Statement containing the applicant s interpretation of law and/ or facts, as the case may be, in respect of the aforesaid questions) 1. Question -1: 1.1 Whether, in the facts and circumstances as explained in Annexure II, supply of service of: (i) Printing of Pre examination item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard, the following are to be considered: (i) The services provided by the applicant to an educational board by way of printing of question papers, OMR sheets (Optical Mark Reading), answer booklets which enables the educational institution / universities to conduct the examination. The said service provided by the applicant to the educational institution is towards conduct of examination. Since, the service provided by the applicant towards pre-examination items will be used by the educational institution for conduct of examination. The applicant submits that the aforesaid exemption as outlined in the notification will be applicable to the applicant s case. Thus, the services provided by the applicant to the educational institutions by way of supply of pre-examination materials will not be liable to Goods and Service tax. (ii) The services provided by the applicant to the educational boards by way of printing of marks card, grade card, certificates etc. which acts as a medium for communication of examination results to students. The said activity acts as a last leg towards completion of the activity of conducting the examination process by the educational inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shall accordingly be construed as Railway Tickets and not Railway paper . (b) The Railway tickets printed on the Railway paper should be classifiable as products of the printing industry , which will be Tickets . The Railway paper is not the product of printing industry, but it is the Tickets which is the product of the printing industry. (c) The printing was the primary purpose and without it, the Railway paper on which the matter was printed, is of no use to the appellant s customer. (d) The trade as well as in common parlance, treat these products as Tickets and not Railway paper. (e) The product wherever printed must be classified having regard to what it means and how it is understood in common parlance. Thus being the case, it is the printing on the Railway paper, which communicates the message to the buyer that the product supplied to him is Railway Tickets and not Railway paper . The printing of the Railway Tickets communicates to the Indian Railway about the product and this serves a definite purpose of the Indian Railways. Thus, the applicant based on the above would prefer to the classification of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification No. 8/2017- Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-lntegrated Tax (Rate), dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13th October, 2017, which is as under: SI.No. Heading Description of Service Rate (Percent) Condition 26 9988 (Manufacturing services on physical inputs (goods) owned by others) (ii) Services by way of treatment or process on goods belonging to another person in relation to (c) printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5% percent or NIL; SGST @ 2.5% percent or NIL; IGST or NIL 2.5 Thus, the applicant based on the above facts submits that the activity of printing of cheque, the goods being the cheque in the given case would fall under within the ambit of Chapter 4907. Such goods attract the rate of tax i.e., CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 29th June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification No. 8/2017-lntegrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-lntegrated Tax(Rate) dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13 th October, 2017 which is as under: SI.No. Heading Description of Service Rate (Percent) Condition 26 9988 (Manufacturing services on physical inputs (goods) owned by others) printing and reproduction services; materials recovery services) i) Services by way of printing of all 6 (Manufacturing goods falling under Chapter 48 or services on 49 [including newspapers, books physical inputs (including Braille books), journals (goods) owned and periodicals], which attract by others) CGST @ 6 per cent or 2.5 per cent, SGST @ 6 per cent, or 2.5 per cent, or Nil; IGST @ 12 per cent or 5 per cent or Nil. where only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the OPL prints the Cheques, loose or in Book form and then supplies the same to various Customer Banks once the final output is ready. (iii) Printing of Railway Tickets for Indian Railways OPL provides the services of printing of Railway Tickets to Indian Railways (a) Physical inputs i.e. paper alone supplied by customer i.e Indian Railways, however inks which are used for printing belong to the OPL itself; (b) Physical inputs including paper and inks which are used for printing belong to the OPL itself; In the above scenarios, the OPL prints the Tickets and then supplies the tickets to the Indian Railways once the final output is ready. (Statement containing the OPL s interpretation of law and/or facts, as the case may be, in respect of the aforesaid questions) 1. Question -1: 1.1 Whether, in the facts and circumstances as explained in Annexure II, supply of service of: (i) Printing of examination items like question papers, OMR sheets (Optical Mark Reading), Answer booklets for conducting of an examination by the educational boards or institutions be treated as exempted supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat can be classified as supply of goods or supply of services for the printing industry transactions. Para 4 of the Circular is reproduced below - 4. In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute suppIy of service falling under heading 9989 of the scheme of classification of services. In OPL s case, all the content is owned and provided by the customer and OPL only prints the content on the examination booklets and further supplies such examination booklets to the customer. Once the examination booklets are printed with the material supplied by the educational institution, such examination booklet cannot be used by any other institution or board. It is exclusively for the use of the customer of OPL. This entails that the transaction will be covered by the above referred paragraph and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 12/2017 - Central Tax (Rate), dated 28th June, 2017 and as amended by Notification No.2/2018 - Central Tax(Rate), dated 25th January, 2018; Entry No. 66 of Notification No. 12/2017 - State Tax(Rate), dated 29th June, 2017; and Entry No. 69 of the Notification No. 9/2017 - Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 2/2018- Integrated Tax (Rate), dated 25th January, 2018. Hence, the said exemption notification has to be available to OPL. QUESTION: 2 As per the facts and circumstances as explained in Annexure II, what would be the classification and the GST rate, for the supply of services in the nature of printing of cheques in the below mentioned two cases, where the physical inputs of paper belongs to the OPL and where the physical inputs of paper belongs to the customer? 4. OPL s interpretation of Law: Classification of supply 4.1 OPL carries out the activity of printing on the paper in the above mentioned situations i.e., input (paper) belonging to the OPL. Hence, the product which is generated from the activity should be treated as Cheques, due to the following reasons:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly. OPL submits that the process of printing of cheques undertaken by the OPL is on the input, i.e., paper, belongs to customer bank, who are registered persons. Hence, the process of printing undertaken by the OPL should be construed as job-work . Further, in terms of Entry No. 3 of Schedule II appended to the CGST Act, 2017, any treatment or process which is applied to another person s goods is a supply service, and accordingly printing of cheque by the OPL shall be construed to be supply of service. OPL submits that the aforesaid activity of job-work carried out by the OPL will be taxable at the rate specified in Entry No. 26 with heading 9988(ii)(c) of Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 as amended by Notification No. 20/2017-CentraI Tax (Rate), dated 22nd August, 2017 and Notification No. 31/2017-CentraI Tax (Rate), dated 13th October, 2017; Notification No.11/2017 -State Tax (Rate), dated 29th June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate); dated 23rd November, 2017; Notification No. 8/2017- Integrated Tax (Rate), dated 28 th Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) The Railway tickets printed on the Railway paper should be classifiable as products of the printing industry , which will be Tickets . The Railway paper is not the product of printing industry, but it is the Tickets which is the product of the printing industry. (c) The printing was the primary purpose and without it, the Railway paper on which the matter was printed, is of no use to the OPL s customer. (d) The Trade as well as in common parlance, treat these products as Tickets and not Railway paper: (e) The product wherever printed must be classified having regard to what it means and how it is understood in common parlance. Thus being the case, it is the printing on the Railway paper, which communicates the message to the buyer that the product supplied to him is Railway Tickets a not Railway paper . The printing of the Railway Tickets communicates to the Indian Railway about the product and this serves a definite purpose of the Indian Railways. (f) The printed railway ticket assumes a fiduciary value once it has been printed with the monetary value of the journey to be undertaken by the passenger. The printed ticket without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2017 as amended by Notification G.O.Ms No.227, dated 05th October, 2017 and Notification No. 31/2017 - State Tax (Rate), dated 23rd November, 2017; Notification NO. 8/2017- Integrated Tax (Rate), dated 28 th June, 2017 as amended by Notification No. 20/2017-lntegrated Tax (Rate), dated 22nd August, 2017 and Notification No. 39/2017-lntegrated Tax (Rate), dated 13th October, 2017, which is as under: SI.No Heading Description of Service Rate (per cent.) Conditions 26 9988 (Manufacturing Services on physical inputs (goods) owned by others) (ii) Services by way of treatment or process on goods belonging to another person in relation to (c) printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5% percent or NIL; SGST @ 2.5% percent or NIL; IGST @ 5% or NIL 2.5 Thus, OPL based on the above facts submits that the activity of printing of railway tickets, the goods being the railway tickets in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as reproduced verbatim, could be seen thus- With reference to above subject M/s. Orient Press Ltd. has filed application for Advanced Ruling in respect of questions raised by him in his application. I view of above I submit my comments to each question raised as follows. Question :- Whether supply of service of (i) Printing of Pre-examination items like question papers, OMR sheets (Optical Mark Reading), answer booklets; (ii) Printing of Post- examination items like marks card, grade cards, certificates to the educational boards of up to higher secondary. Be treated as exempted supply of service. Comments: With respect to above questions / submit that Applicant has sought whether such services are exempted by virtue of Notification No.12/2017- Central Tax (rate), dated 28th June 2017 and as amended by Notification No.2/2018- Central Tax (rate), dated 25th January 2018; Entry No:66 of Notification No.12/2017- State Tax (Rate), dated 29th June 2017 and Entry No.69 of the Notification No:9/2017- Integrated Tax(Rate), dated 28th June 2017 as amended by Notification No.2/2018-Intergrated (Rate), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nless it is issued by Bank it will be classifiable as Product of the printing industry therefore will not be exempted under heading 4907. Similarly railway ticket is something which accrues its meaning as ticket only when it is sold by railway or its authorised representative. It is promise made by railway to allow Journey as mentioned on ticket. I would also like to draw your attention towards S.143 of Railways Act which is reproduced here for your ready reference. 143. (1) If any person, not being a railway servant or an agent authorised in this behalf,- (a) carries on the-business of procuring and supplying tickets for travel -On -a railway or for reserved accommodation for journey in a train; or (b) purchases or sells or attempts to purchase or sell tickets with a view to carrying on any such business either by himself or by any other person he shall be punishable with imprisonment for a, term which may extend to three years or with fine which may extend to ten thousand rupees, or with both, and shall also forfeit the tickets which he so procures, supplies, purchases, sells or attempts to purchase or sell: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Post examination items like marks card, grade card, certificates to educational boards (up to higher secondary) after scanning of OMR Sheets and processing of data in relation to conduct of an examination can also be treated as exempted supply of service by virtue of the same notification. 5.3 As per under Entry No. 66 of the Notification No. 122017 - C T (Rate), dated 28th June, 2017 as amended, services provided to an educational institution, by way of Services relating to admission to, or conduct of examination by, such institution falls under Heading 9992 (Education Services and exempted from payment of GST. Such services are exempted only if they are, in the subject case, related to conduct of examination by such institution. 5.4 We find that question papers, OMR sheets (Optical Mark Reading), answer booklets are very essential and necessary requirements to conduct any examination. To print question papers the content i.e. the questions will be provided by the institution conducting the examination. The contents of the OMR sheets and answer sheets will also be provided accordingly by the institution. Para No 4 of Circular No. 11/11/2017-GST dated 20.10.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted that the subject product which is printed by the applicant is covered under Chapter Heading 4901 (as railway Tickets) as provided in Sr. No. 118, Notification NO. 2/2017-Central Tax (Rate), dated 28th June, 2017 and exempted under GST. The jurisdictional office has submitted that a railway ticket is something which accrues its meaning as ticket only when it is sold by railway or its authorised representative. Hence the service provided by applicant is towards printing services it cannot be exempted. 5.8 Chapter Hdg 4802 deals with various types of paper like cheque paper, currency note paper, etc. and the GST rate for such paper is 12%. There is no doubt in our minds that Railway paper on which printing is done will fall under this Chapter Heading. However the Railway Ticket as the applicant has stated is nothing but a product of printing industry and after the printing is done the said product will be covered under Chapter 49 of the Tariff. CH 4907 deals with Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amended which covers Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books physical inputs (including Braille books), journals (goods) owned and periodicals], which attract by others) CGST @ 6 per cent or 2.5 per cent, or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printed and is taxable at 12% GST. In a situation where the applicant does printing of cheques where physical input i.e. paper is supplied by the client, then the same will also be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (ii) (c) i.e. Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST@ 2.5% or Nil and will be taxable @ 2.5% CGST. 05. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) No. GST- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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