The Daman and Diu bench of the Appellate Authority for Advance Ruling ( AAAR ) has supported the order of AAR and carried that 18% GST appropriate on printing of Pamphlet & Leaflet comes beneath the class of supply of service.
The petitioner is the owner of Temple packaging Pvt ltd and is involved in the operation of printing leaflets falling under CHS No. 4901. The specified product is made out of the inputs like paper or ink owned via appellants and the content provided through the clients precisely located in the pharmaceutical sector. The leaflets made by the appellants are sold to the customers on the agreed acknowledgement which is relied on the manufacturing expenses made by the petitioners by using the inputs owned by the appellants.
Beneath the central excise provision, they cleared that as excisable goods beneath CHS No. 4901 as privileged being chargeable to NIL tariff rate, they relocated to GST regime with effect from July 2017 and began supplying that as the supply of goods on payment of 5% GST levied at Sr. 201 of Schedule-I of Notification no. 1/2017-CT(Rate).
The delegation of the federation of master printers where the appellant is the member met within the officials in the Ministry of Finance in New Delhi on 21.07.2017 asking for the transparency on the GST rates subjected to apply to several printed products and in the course of meeting the same was build to know that when the printed products are manufactured through the content provided by the customer then the same would be needed to be classified beneath the class of the service and would come beneath SAC 9988.
For the concern of the clarification given through the federation majority of the members has begun clearing the goods beneath the class of the service rather than the goods and the appellant would indeed begin clearing the goods beneath the class of service SAC no. 9989 via furnishing the GST of 18%.
Because of uncertainty after the vide circulars of CBIC on the date, 11 /11/2017 and 27/01/2018 divergent practice was prevailing in the industry in which some of the manufacturers cleared the same as a good on the GST payment of 5% beneath CHS 4901 and some of the manufacturers cleared it beneath the class of goods on the GST payment of 12% beneath CHS 4911 to prevent the risk of recovery of differential amount of GST in the coming times. The appellants are involved in providing the printed leaflets to customers located in SEZ as well as in the physical export/deemed export against EPCG/advance license.
While affecting the zero-rated supply to the SEZ units or with respect to the own EPCG license the appellants were facing hurdles with respect to the export of the obligation as they were required to fulfil the export duty through delivering as goods under CHS No. 4901. Due to the same uncertainty for the taxability on the supply of the leaflets the petitioner was comfortable choosing the application prior to the advance ruling authority asking for the transparency on the printed leaflets supplied via petitioner comes beneath the class of the supply of the goods comes beneath CHS No. 4901 and not as a supply of service under SAC No. 9899.
AAR (Authority for Advance Rulings) passed the order mentioning that the printing of the pamphlet and the leaflet comes beneath the class of the supply of service comes beneath SAC No. 9989 and draws an 18% GST. the petitioner has moved to AAAR as he gets hurt from the view of AAR.
