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TMI Blog2019 (10) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... nd periodicals on the physical inputs of the printer himself, which is taxable at 12% - If the printed item is not newspaper or book or journal or periodical, then the services of the applicant is covered under Entry No. 27(ii) which reads other manufacturing services; publishing, printing and reproduction services; material recovery services, other than (i) above and hence is liable to tax at 18% Where the principal material i.e. paper and paperboard belong to the customer, on which the content supplied by the customer is printed and the finished goods are supplied - HELD THAT:- Since the nature of activity of the applicant is printing, entry 26(ii)(b) is not applicable. If the final printed material is a book or a journal or a periodical and if the materials on which the printing is done are provided by the customers, then the activity would be covered under entry 26(i)(d) and would be liable to tax at 2.5% CGST plus 2.5% SGST. But if the final printed material is other than a book or a journal or a periodical but the involves the jobwork of printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6 per cent, then the activity is liable to tax at 6% C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processed goods. Sometimes, the applicant uses his raw materials totally and completes the process and supplied the goods. He undertakes printing and supply of printed paper and paper-boards. 4.3 The applicant states that he is confused whether the supply activity carried out by him falls under supply of goods or supply of services and what is the correct rate of tax chargeable under each of the above category. Therefore applicant seek the clarification on the following a) Printing carried out by the applicant, where the content is supplied by the customer, on the paper and paper board purchased by the applicant. He states that he supplies the printed paper and paper board to the customer. b) Printing carried out by the applicant, where the content is supplied by the customer, on the paper and paper board belonging to the customer. He states that he supplies the printed paper and paperboard to the customer. 4.4 The applicant states that in respect of the activity involved in (a) above he is of the opinion that the activity falls under the category of services by way of printing of all goods falling under Chapter 48 or 49 (including newspapers, books (including B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49, rates range from 5% to 18%. At the same time printing under services attract different rates including Nil rate. No clarification has been issued by the Government as to which GST rates are to be charged by the printers. 6.2 The applicant also states that it would not be out of place to mention that carrying out an intermediate production process as job work in relation to printing is exempted from service tax (ref Notification No. 12/2012 dated 17th March 2012). It is not clear if the exemption given to printing industry is still in force. 6.3 The applicant argues that there cannot be two yardsticks. He questions if printing is not under supply of goods , then why items like printing of catalogue, brochure, posters and many other are given under Chapter 48 and 49 in the Notification No. 1/2017 - Integrated Tax (Rate) issued on 28th June, 2017? For any printed item, the content will always be from the owner/ customer, be they brochure, poster catalogue or any other item. Suppose there is an owner of the content , who is also a printer, to whom he will bill such items? Then why such details are given in the Chapter 49? The applicant argues that if printing is under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial i.e. paper and paperboard belong to the applicant, on which the content supplied by the customer is printed and the finished goods are supplied, and b) where the principal material i.e. paper and paperboard belong to the customer, on which the content supplied by the customer is printed and the finished goods are supplied 8.4 In the first case, the applicant is effecting the supply of printed materials where the paper and paper-boards belong to the applicant himself. There are two supplies merged into one for a single consideration, which are supply of paper and paper-boards and the supply of the service of printing. These supplied being made conjoint as a naturally bundled supply and for a single consideration, the same would amount to a composite supply as per clause (30) of section 2 of the CGST Act, which reads as under: (30) composite supply means a supply made by a taxable person to a recipient consisting of two or more supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply And the principal su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.1 Similarly, in the second case, where the materials like paper and paper-boards are supplied by the customer and the printing is done on these paper and paper-boards using the materials of the applicant, based on the content given by the customer, this would also amount to a job work in which the applicant provides the manufacturing services on the physical inputs (goods) owned by others (customers) and is covered under Entry No.26 of the Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017, which reads as under: Sl.No. Chapter, Section, or Heading Description of Service Rate (per cent) Condition 1 2 3 4 5 26 Heading 9988 (Manufacturing services on physical inputs (goods) owned by others) (i) Services by way of jobwork in relation to - (a) printing of newspapers; (b) Textiles and textile products falling under Chapter 50 to 63 in the First schedule to the Customs Tariff Act, 1975 (51 of 1975) (c) cut and polished dia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is involves printing as a job work on the base materials provided by the customer and these materials should fall under Chapter 48 and 49. c. Entry 26(ii)(b) - Services by way of any treatment or process on goods belonging to another person, in relation to printing of books (including Braille books), journals and periodicals - this includes processes other than printing like book binding, edge cutting etc on the goods belonging to others. d. Entry No. 26(iii) - Manufacturing services on physical inputs (goods) owned by others other than (i) and (ii) above e. Entry 27 is not applicable to these type of transactions as the base material on which printing is done is not belonging to the applicant. Since the nature of activity of the applicant is printing, entry 26(ii)(b) is not applicable. If the final printed material is a book or a journal or a periodical and if the materials on which the printing is done are provided by the customers, then the activity would be covered under entry 26(i)(d) and would be liable to tax at 2.5% CGST plus 2.5% SGST. But if the final printed material is other than a book or a journal or a periodical but the involves the jobwork o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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