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TMI Blog2022 (8) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Government . Since the applicant has stated that he provides the materials (physical Inputs) and the content is owned by the KTBS, the applicant is into printing of the content supplied by the recipient of supply and the same is the principal supply. Therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services - Rate of tax being charged at present by the printers on the printing of textbooks supplied to KTBS i.e., @ 12%, is incorrect and the same is taxable @ 18% as per entry No. 27 of Notification No.11/ 2017-Central Tax (Rate) dated: 28.06.2017 further amended vide Notification No.6/ 2021-Central Tax (Rate) dated: 30.09.2021. - KAR ADRG 25/2022 - - - Dated:- 12-8-2022 - DR. M.P. RAVI PRASAD AND SRI. T. KIRAN REDDY, MEMBER Represented by : Sankari V. Krishnan, Advocate ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/s. Bhagyam Binding Works, (hereinafter referred to as the applicant), No.25/1, 1st Main Road, New Timber Yard Layout, Mysore Road, Bangalore-560 026 having GSTIN 29AAIFB0307K1ZK have filed an application for Advance Ruling under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved school textbooks. 5.3 KTBS receives grants from the Government of Karnataka for the supply of textbooks freely to students enrolled in government and aided schools and by sales to private schools affiliated to the Karnataka State Board. KTBS calls for tenders for the printing and supply of textbooks on contract basis, wherein the Contractor supplies the service of printing. The materials (physical inputs) are supplied by the Contractor and all the content is provided by and belongs to KTBS. KTBS is also registered under GST and at present GST is charged by Contractors for printing of textbooks @ 12%. 5.4 This office had addressed a letter to the Assistant Commissioner of Commercial Taxes, LGSTO-63, Bengaluru on 28-03-2022 to file comments on the application filed. In response to this, the officer has furnished comments as below: KTBS (Karnataka Text Book Society) is a Society registered under Karnataka Societies Act 1960. KTBS receives grants from the Government of Karnataka for Supply of text books freely to the students enrolled in government aided schools and by sales to private schools affiliated to the Karnataka State Board. Since there is element of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... educational institution' in terms of the definition provided at SL No. 2(y) of notification No.12/ 2017 - Central Tax (Rate) dated: 28.06.2017 as amended. Query No. 2: Alternatively, whether Karnataka Text Book Society can be classified as State Government for the purpose of applicability of GST on printing services provided to it by the applicant? Comments : As discussed above, the Karnataka Text Book Society being a society registered under the Karnataka Societies Act, 1960 cannot be considered as 'State Government'. However, as held by the Kerala Authority for Advance Ruling in the case of M/ s Kerala Books and Publications Society, dated 05.01.2021, the Karnataka Tex Book Society can be considered as Governmental Authority as defined in Para 2 (4) of the Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017, as amended, subject to fulfillment of the conditions prescribed for the 'Government Authority . Query No. 3: Whether the rate of tax being charged at present by printers on the printing of text books supplied to the Karnataka Text Book Society i.e. @ 12% is correct, or whether any exemptions or lower rate of tax would be applicable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al authority by way of any activity in relation to any function entrusted to a panchayat under Article 243G. The exemption under Sl No 3 of the said notification is in respect of specified services provided to the State Government or local authority or a Governmental authority or a Government entity and the exemptions at Si. Nos. 4 and 5 are in respect of specified services provided by a Governmental Authority. The TP here is providing services to KTBS. TP himself is not Govt. Authority. He does not fit into Sr No. 3 of the Notification as he supplies paper books along with printing services and this entry excludes composite supply involving supply of goods. Sr no. 4 and 5 applies to services by specified services provided by a Governmental Authority. Further KTBG cannot be treated as an Educational Institution. Also there is no specific exemption available on the activity. There can be no intendment to the wording of the notification. 6. Applicant's Interpretation of Law: 6.1 The Applicant states that KTBS is established to supply textbooks to students under the Sarva Shiksha Abhiyana. In the achievement of the goal of the Sarva Shiksha Abhiyan Scheme, KTBS ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rulings of the Gujarat High Court as affirmed by the Supreme Court in the case of Sahitya Mudranalaya Private Limited v. Additional Director General. They have also relied on the order of the Supreme Court in the case of Assam State Textbook Production and Publication Corporation Limited v. CIT. 6.1.6 The applicant states that Education would necessarily have to mean the entire process of learning and not simply limited to the actual imparting of knowledge in schools, colleges or institutions. The process of learning in as much as it concerns the school level classes from 1 to 10 is incomplete without the relevant prescribed textbooks and without the textbooks supplied by KTBS, there could be no examinations nor did qualifications base thereon hand out to any student. 6.1.7 The printing and supply of textbooks would therefore have to be included within the ambit of education and the supplier, i.e., Karnataka Textbook Society an educational institution . If this explanation is accepted, then the Applicant's services of printing of textbooks for KTBS would also be covered within the ambit of services relating to admission to, or conduct of examination by, such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r all children between the ages of 6 and 14, and as such aims at effectively involving the Panchayati Raj Institutions, School Management Committees, Village and Urban Slum Level Education Committees, Parents' Teachers' Associations, Mother Teacher Associations, Tribal Autonomous Councils and other grass root level structures in the management of elementary schools. 6.2.5 The applicant submits that KTBS would be classifiable as State Government by virtue of its composition and control as well as the activity undertaken by it. 6.2.6 Notification 12/2017 Central Tax (Rate) as amended provides for certain services to be subject to Nil GST, the relevant extracts of which are reproduced below: Sl.No. Heading Description 3 Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government, Union territory, local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be classified as educational institution or State Government for the purposes of applicability of GST on printing services provided to it by the Applicant. 11. Now we discuss to know whether KTBS can be classified as educational institution . Educational Institution is defined at clause 2 (y) of the Notification No.12/2017-Central Tax (Rate) dated: 28.06.2017 as below: (y) educational institution means an institution providing services by way of - (i) pre-school education and education upto higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; (iii) education as a part of approved vocational education course; ; KTBS is a Society registered under the Karnataka Societies Act, 1960 and receives grants from the Government of Karnataka for the supply of textbooks freely to students enrolled in government and aided schools and by sales to private schools affiliated to the Karnataka State Board. 12. From the above we can deduce that KTBS is not an institution providing services by way of pre-school or higher secondary education or education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notification No.11/ 2017-Central Tax (Rate) dated: 28.06.2017 further amended vide Notification No.6/ 2021-Central Tax (Rate) dated: 30.09.2021 as below: SI.No. Chapter, section or Heading Description of Service Rate (per cent.) Condition 27 9989 Other manufacturing services; publishing, printing and reproduction services; material recovery services 9 - 15. In view of the foregoing, we pass the following RULING i. KTBS cannot be clrmsified as educational institution for the purposes of applicability of GST on printing services provided to it by the Applicant. ii. KTBS cannot be classified as State Government for the purposes of applicability of GST on printing services provided to it by the Applicant. iii. Rate of tax being charged at present by the printers on the printing of textbooks supplied to KTBS i.e., @ 12%, is incorrect and the same is taxable @ 18% as per entry No. 27 of Notification No.11/ 2017-Central Tax (Rate) dated: 28.06.2017 further a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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