In re V S Hi-Tech Security Forms Private Limited (GST AAR Telangana)
Introduction: The GST (Goods and Services Tax) regime in India has brought about significant changes in the taxation of goods and services. One of the critical aspects of GST is understanding the exemptions it provides for various services. In this article, we will delve into the GST exemption for printing services related to examination materials and the implications for businesses engaged in this sector.
Understanding the Applicant’s Case: The case in question involves M/s. V S Hi-Tech Security Forms Private Limited, a company engaged in the business of printing security-related examination materials such as question papers, OMR (Optical Mark Reading) sheets, answer booklets, marks cards, and certificates for educational institutions. They have sought clarification on whether their services fall under the GST exemption provided under Notification No. 12/2017-CGST(Rate), dated 28-06-2017.
GST Exemption for Educational Services: The GST law includes exemptions for certain educational services, primarily aimed at supporting educational institutions. These exemptions are outlined in Sr. No. 66 of Notification No. 12/2017-CGST(Rate). They encompass services provided by an educational institution to students, faculty, and staff, as well as services related to admission and the conduct of examinations.
Composite Supply of Printing Services: In the case presented by the applicant, they provide printing services to educational institutions for the production of examination materials. It is important to note that this service is considered a composite supply, consisting of both goods (paper and ink) and services (printing). The principal supply in this composite supply is the printing service.
Exemption Applicability: Based on the provisions of Sr. No. 66(b)(iv) of Notification No. 12/2017-CGST(Rate), services related to the conduct of examinations by educational institutions are exempt from GST. This includes services such as printing of pre-examination items like question papers and post-examination items like marks cards and certificates.
CBIC Circular Clarification: To provide further clarity, the Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 151/07/2021-GST dated 17.06.2021. This circular explicitly states that GST is exempt on input services related to the admission and conduct of examinations when provided to educational institutions. These input services include printing services, among others.
Classification and HSN Code: The classification of the supply is done based on the principal supply, which in this case is printing services (HSN Code 9989). The applicant’s services fall under this category.
Conclusion: In conclusion, the printing of examination materials, including pre-examination and post-examination items, is exempt from GST when provided to educational institutions. This exemption is in line with the government’s efforts to support the education sector. Businesses engaged in providing printing services for examination materials can avail of this exemption and classify their services under HSN Code 9989.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TELANGANA
1. M/s. V S Hi-Tech Security Forms Private Limited, Road No. 7, Plot No. 74, Aleap Industrial Estate, Pragathi Nagar Hyderabad, Rangareddy, Telangana -500090 (36AADCV2323F1ZN) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules
2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.
3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- under SGST and Rs. 5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act’2017. The application is, therefore, admitted after examining it and the records called for and after hearing the applicant as per section 98(2) of TGST Act’2017.
4. BRIEF FACTS OF THE CASE:
4.1 The applicant M/s. V.S. Hitech Security Forms Private Limited, is engaged in the business of printing of Security printing products like, barcoded OMR answer booklets, OMR sheets, Certificates, Marks Memos.
They have contended in their submissions that they provide printing services to various educational institutions based on their requirements using the paper and ink of the applicant. That the products are designed and printed as per the requirements of particular customer and that such products cannot be delivered to any other person as printing in the applicant case is combined with security features.
(i) Whether printing of Pre-Examination items like question papers, OMR sheets (optical Mark Reading), answer booklets for conducting of an examination by the educational boards be treated as exempted supply of service in terms of serial number 66 of Notification No. 12/2017-CGST(Rate), dated 28-06-2017 as amended
(ii) Whether 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 in relation to conduct of an examination be treated as exempted supply of service as per serial Number 66 of Notification No. 12/2017-CGST(Rate), dated 28-06-2017 as amended?
(iii) Whether scanning and processing of results of examinations be treated as exempted supply of service by virtue of in terms of serial Number 66 of Notification No. 12/2017-CGST(Rate), dated 28-06-2017 as amended?
The applicant seeks classification of the below products and applicability of exemption given under notification 12/2017, dt.28.06.2017 at serial no. 66(b)(iv), hence this application.
4.2 Company Background:
The applicant M/s. V.S.Hitech Security Forms Private Limited is classified as a private limited company and is located in Rangareddy, Telangana State, they provide printing services to various educational institutions based on their requirements using the paper and ink of the applicant. That the products are designed and printed as per the requirements of particular customer
5. QUESTIONS RAISED:
1. Is supply of Printing of Pre-examination items like printing services viz; OMR sheets, Answer sheets, marks card etc to an educational institution is exempt from GST?
2. Is Printing of Post-examination items like marks card, grade card, certificates to the educational boards of up to higher secondary is exempt from GST?
3. Is Scanning and processing of results of examinations exempt from GST?
4. Whether the Applicant is entitled to avail the exemption on above services as per entry no.66 of the Notification No. 12/2017-CGST(Rate), dated 28-06-2017?
6. PERSONAL HEARING:
The Authorized representatives of the unit namely Sri. Nagendra Prasad, Advocate, attended the personal hearing held on 24.05.2023. The authorized representative reiterated averments in the application submitted.
7. DISCUSSION & FINDINGS:
7.1 The applicant has sought clarification regarding the applicability of the exemption for the services such as:
