In re Guitar Head Publishing LLP. (GST AAR Karnataka)
A. Whether the supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India by the applicant are treated as supply under GST?
The supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India by the applicant does not amount to supply under GST.
B. Whether GST is levied on the shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in USA, UK and Canada (non-taxable territory)?
The shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in USA, UK and Canada (non-taxable territory) are not exigible to GST.
C. Whether printing charges for printing of books charged by the Printer located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant?
The printing charges, for printing of books, charged by the printer located in USA (non-taxable territory) are taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant
D. Whether the services received by the applicant from Foreign service provider such as warehousing of printing books located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST?
The services received by the applicant from foreign service provider such as warehousing of printed books located in USA (non-taxable territory) is not taxable under Reverse Charge Mechanism under GST.
E. Whether input tax credit can be availed, to the extent of inputs and input service on the transaction covered in Question 1 above?
The input tax credit can’t be availed, to the extent of inputs and input service on the transaction covered in first question as the said transaction does not amount to supply under GST.
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 & UNDER 98(4) OF THE KGST ACT, 2017
M/s. Guitar Head Publishing LLP, # 306/A, Ground Floor, 13th Cross, Near LCA Ramesh Nagar, Marathahalli, Bengaluru-560037 having GSTIN 29AAVFG2223Q1ZN, have filed an application for Advance Ruling under Section 97 of the CGST Act, 2017, read with Rule 104 of CGST Rules 2017 and Section 97 of KGST Act, 2017 read with the KGST Rules 2017, in FORM GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The applicant is engaged in business of selling guitar training books in united States of America, United Kingdom and Canada through their website. The applicant sends soft copy of the book to the printer located in USA, who in turn prints it and ships to the customers located in USA, UK and Canada. Further, in another business model the applicant is having an agreement with Amazon Inc. who through their website “amazon.com” based on the choice of the customers either prints the books and sells it to the consumers on their own account or will share the link to download the e-books material in an of the electronic devices and pays royalty to the applicant as agreed between the two parties.
In view of the above, the applicant sought advance ruling, on classification of goods and services, in respect of the following questions:-
i. Whether the supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India by the applicant are treated as supply under GST?
ii. Whether GST is levied on the shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in USA, UK and Canada (non-taxable territory)?
iii. Whether printing charges for printing of books charged by the Printer located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant?
iv. Whether the services received by the applicant from Foreign service provider such as warehousing of printed books located in USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST?
v. Whether input tax credit can be availed, to the extent of inputs and input service on the transaction covered in Question 1 above?
3. Statements of relevant facts having a bearing on the questions raised:
3.1 The applicant is in the business of selling guitar training books in United States of America, United Kingdom and Canada through their website. The applicant sends soft copy of the book to the printer located in USA, who in-tum prints it and ships it to the customers located in USA, UK and Canada. Further, in another business model the applicant is having an agreement with Amazon Inc. who through their through their website “amazon.com” based on the choice of the customers either prints the books and sells it to the consumers on their own account or will share the link to download the e-books material in any of the electronic devices and pays royalty to the applicant as agreed between the two parties.
3.2 The applicant is a Limited Liability Partnership registered under the LLP Act 2008. The applicant’s vision is to make available the guitar training books to every individual in the countries of USA, UK and Canada either as paperback books or e-books and also reach entire global market at the earliest. The main intention for guitar training books is that, in learning music from musician – there are few limitations like: long duration, physical attendance for training. But, with the applicant’s guitar training books, every individual can learn at their leisure time.
3.3 Business model:
The applicant has three models:-
a) Sales through own website
b) Sales through Amazon platform
c) Online Guitar training courses through the website of Guitar Head
A. Sales through own website:
In this transaction, customer in USA, UK and Canada places an order through Applicant’s website by making payment in Foreign Currency. Applicant places the bulk order with the printer, who prints and supplies to the warehouse. The books are stored in the warehouse for quick delivery to the customer. The applicant shares the order details to the warehouse service provider, who in turn ships the books to customer. The applicant pays printing charges, warehouse charges and shipping charges to the respective service provider. The applicant collects the price of book along with shipping charges.
