In re Dachepalli Printers (GST AAR Telangana)
What is the rate of tax under CGST & SGST on the service of the printing in cases where content is supplied by the recipient along with raw materials such as paper & cover board?
1. Where content as well as physical inputs are supplied by the recipient of printing services the rate of tax is 2.5% under CGST & SGST respectively
2. Where only content is supplied by the recipient of printing services, i.e., the publisher and the physical inputs used belong to the printer, the rate of tax on such service is taxable upto 30.09.2021 – 6% and from 01.10.2021 onwards 9% under CGST & SGST respectively.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TELANGANA
[ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE TEALANGANA GOODS AND SERVICES TAX ACT, 2017.]
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1. M/s. Dachepalli Printers, Plot No.121/5, IDA, Phase-2 Cherlapally, Hyderabad, Medchal, Malkajgiri, Telangana – 500 051 (36AAQFD8935R1ZB) 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/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. The application is therefore, admitted.
4. BRIEF FACTS OF THE CASE:
4.1 The applicant M/s. Dachepalli Printers are in the business of printing text books for Government of Telangana as well as other private organizations where the content is supplied by the recipient of the service. They need a clarification regarding the percentage of CGST and SGST to be applied for the supply of their services. Hence this application.
4.2 Company Background:
M/s Dachepalli Publishers from the finest scholarly works to the higher education textbooks and from the best school courses to the unparalleled digital resources for teaching and learning. Their spectrum of academic and educational resources dates back to 1908.
5. QUESTIONS RAISED:
Q1. What is the rate of tax under CGST & SGST on the service of the printing in cases where
content is supplied by the recipient along with raw materials such as paper & cover board?
6. INTERPRETATION OF APPLICANT:
M/s. Dachepalli Printers are one of the printers for Telangana print textbooks for Government of Telangana. They are seeking clarity over the percentage of GST. Which they should levy on the Textbook printing job work for the State of Telangana and other states.
As the Department is confused whether the GST is 5%, 12%, 18% or exempted. And even their other printers are unaware as there is no clarity on this kind of work. The Applicant is requesting the correct percentage of GST which they should levy for the job works of printing done by them for the State of Telangana textbook press. Since raw material like paper and cover board and content is provided by the Textbook press of Telangana. And rest of material required for printing like inks, chemicals, hot melt gum, pinning wire, packing straps, aluminium plates are purchased by them at the GST slab rate of 18% respectively.
The Applicant is requesting to clarify the rate of tax on the services offered by them. Hence this application.
7. PERSONAL HEARING:
The Authorized representatives of the unit namely Sri D. Vinod Kumar, Partner & Sri B. Venkat Reddy, Manager attended the personal hearing held on 25.08.2022. The authorized representatives reiterated their written statement and averred as follows:
1. That, they are in the business of printing books and receive two types of contracts where the content is supplied by the recipient of services:
a. The recipient of service supplies paper.
b. The recipient does not supply paper.
2. That, they are desirous of a clarification regarding the rate of tax in this two types of printing contracts as they have participated in a bid offered by the Telangana Government text book press. Copy of bid document submitted with application.
As seen from the bid document submitted by the applicant, the main work under discussion to be done are as under:
DISCUSSION & FINDINGS:
8.1 The applicant is seeking clarification on the taxability of transactions which is effected by him, which are as under:
1. Where content as well as physical inputs are supplied by the recipient of printing services.
2. Where only content is supplied by the recipient of printing services.
8.2 In the first case, Where content as well as physical inputs are supplied by the recipient of printing services, i.e., Government of Telangana, this would amount to a job work in which the applicant provides the manufacturing services on the physical inputs (goods) owned by recipient and is covered under Entry No. 26 of the Notification No. 11/2017 – Central Tax (Rate), dt. 28-06-2017, which reads as under:
