Printing Of Pamphlet/Leaflet Falls Under The Category Of Supply Of Service, Attracts 18% GST: AAAR

The Daman Appellate Authority of Advance Ruling (AAAR) consisting of Gaurav Singh Rajawat (State Tax) and Seema Arora (Central Tax) while upholding the ruling of the Authority of Advance Ruling (AAR), held that printing of pamphlet/leaflet falls under the category of supply of service and it attracts GST at the rate of 18%.The appellant has been engaged in the activity of printing leaflets (further divided into insert/outsert) and falling under CHS No. 4901. The product has been manufactured out of the inputs namely paper/ink owned by the appellants and content supplied by the clients mainly located in the pharmaceutical sector. The leaflets manufactured by the appellants are sold to the clients on agreed consideration which is entirely based on the manufacturing expenses incurred by the appellants by using inputs owned by the appellants. Under Central Excise regime they cleared the goods as excisable goods under CHS No. 4901 as exempted being chargeable to NIL tariff rate, they migrated to GST regime w.e.f. from 1st July 2017 and started supplying the same as supply of goods on payment of 5% GST. The Delegation of the federation of Master Printers, to which the appellant is a member, met with the officials in Ministry of Finance in New Delhi to seek clarification on GST rates applicable to printed products and during the course of meeting it was made to understand that when the printed products are made by using content supplied by the customer, then it will have to be classified under the category of service and will fall under the SAC 9988. In view of the clarification provided by the federation, most of the members started clearing the goods under the category of service instead of goods and the appellant also started clearing the goods under the category of service SAC no. 9989 by paying 18% GST. The appellant has sought for advance ruling before AAR which has ruled that printing of Pamphlet/leaflet falls under the category of supply of service falling under SAC No. 9989 The appellant challenged the decision of the AAR on the grounds that the leaflet was manufactured on the basis of a contract given by the client which is not a printing contract but for supply of printed leaflets (for supply of goods) on agreed consideration and specifically covered under 4901. The appellant further contended that supply of goods was made on the basis of purchase order issued by the clients for supply of goods under HSN code no. 4901. Chapter note no. 2 of Chapter no. 49 specifically covers the terms "printed" and 49011120 covers printed leaflets whether or not in a single sheet, therefore, printed leaflets fall under chapter 49. The appellant has contended that as per schedule -II(3) of notification dated 28.06.2017 any treatment or process which is applied to other persons goods is supply of service. The treatment or process was carried out on the appellant's own goods only and even rendered the service of printing to himself only and therefore falls under the category' of goods only and not under the supply of service. The AAAR has observed that the client has not approached the appellant merely for procuring leaflet; the intention of the client was to get the content/instruction printed on leaflet. The printing was done as per the instruction of the client and hence it cannot be construed that the appellant was providing service of printing to himself, the printing was done as per the direction and demand of the client on the goods (leaflet) owned by the appellant. Appellant's Name: Temple Packaging Pvt. Ltd. Citation: Order No. 011AAAR/Temple/DMN/UTGST/20-21/17096-21 ClickHere To Read/Download Order

Printing Of Pamphlet/Leaflet Falls Under The Category Of Supply Of Service, Attracts 18% GST: AAAR

Mariya Paliwala

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