ORIENT PRESS LIMITED

The company is engaged in the business of providing the services of printing of security document to its clients, who vary from Government Authorities and agencies, Banks, Educational Boards/Institutions and Private Companies. The details of the services are as follows:
(1) Supply of services to the Educational Boards:
a) Printing of pre and post Examination items for various Educational Boards:
(i) The Company provides the service of printing of both pre and post examination documents to various educational boards. The pre examination documents includes OMR sheets, question papers, answer booklets. The post examination documents include marks card, grade card and certificates.
(ii) Printing of Railway Tickets for Indian Railways. The Company provides the services of printing of Railway Tickets to Indian Railways
b) Physical inputs including paper and inks which are used for printing belong to the company itself;

In the above scenarios, the company prints the Tickets and then supplies the tickets to the Indian Railways once the final output is ready.

The Applicant sought Advance Ruling on following issues:

1. Whether supply of service of
(i) Printing of Pre-examination items like question papers, OMR sheets (Optical Mark Reading), answer booklets;
(ii) Printing of Post-examination items like marks card, grade card, certificates to the educational boards of up to higher secondary; and
(iii) What would be the classification and the applicable GST rate, for the supply of Printing of cheque book/railway tickets
be treated as exempted supply of service by virtue of Entry No. 66 of the Notification No. 12/2017 -Central Tax (Rate), dated 28th June, 2017 and as amended by Notification No.2/2018 – Central Tax (Rate), dated 25th January, 2018; Entry No. 66 of Notification No. 12/2017 – State Tax (Rate), dated 29th June, 2017; and Entry No. 69 of the Notification No. 9/ 2017 – Integrated Tax (Rate), dated 28th June, 2017 as amended by Notification No. 2/2018- Integrated Tax (Rate), dated 25th January, 2018?

Pre/Post Examination Items: As per under Entry No. 66 of the Notification No. 12/2017 – C T (Rate), dated 28th June, 2017 as amended, services provided to an educational institution, by way of Services relating to admission to, or conduct of examination by, such institution falls under Heading 9992 (Education Services and exempted from payment of GST. Such services are exempted only if they are, in the subject case, related to conduct of examination by such institution.

Question papers, OMR sheets (Optical Mark Reading), answer booklets are very essential and necessary requirements to conduct any examination. To print question papers the content i.e. the questions will be provided by the institution conducting the examination. The contents of the OMR sheets and answer sheets will also be provided accordingly by the institution. Para No 4 of Circular No. 11/11/2017-GST dated 20.10.2017 issued vide F. No. 354/263/2017-TRU by the Board states that “In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services” . Hence in the subject case there is a supply of services and since the same are provided to educational institutions, the same shall be classified under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 12/2017 – Central Tax (Rate), dated 28th June, 2017 as amended.

Further conduct of any examination by an educational institute includes both pre examination works, actual conduct of the exams and post-examination works. Hence Printing of Post-examination items is also a supply of services and classifiable under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 12/2017 – Central Tax (Rate), dated 28th June, 2017 as amended.

Printing of cheque book/railway tickets: Chapter Heading 4802 deals with various types of paper like cheque paper, currency note paper, etc. and the GST rate for such paper is 12%.
CH 4907 deals with “Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, share or bond certificates and similar documents of title other than duty credit scrips)”.

GST is applicable to all the supplies of goods and services made through the railways, including passenger tickets, commercial transports and catering services. In a situation where the applicant does printing for Railway Tickets and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under under Heading 9989 of Notification No. 11/2017- Central Tax (Rate) dated 28th June, 2017 as amended which covers “Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books physical inputs including Braille books), journals (goods) owned and periodicals], which attract by others) CGST @ 6 percent or 2.5 per cent, or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer” is taxable at 12% GST.

In a situation where the applicant does printing for Railway Tickets and uses physical input i.e. paper supplied by the Railways then the same will be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (iia) i.e. “Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6%”.

In a situation where the applicant does printing of cheques and uses their own physical input i.e. paper, in such a case it is very clear that the case is covered under under Heading 9989 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 as amended which covers “Services by way of printing of all goods falling under Chapter 48 or 49 [including newspapers, books
physical inputs (including Braille books), journals (goods) owned and periodicals], which attract by others) CGST @ 6 per cent or 2.5 per cent, or Nil, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer” and is taxable at 12% GST.

In a situation where the applicant does printing of cheques where physical input i.e. paper is supplied by the client, then the same will also be considered as a supply of printing services. This scenario will attract the services under Heading 9988 (ii) (c) i.e. “Services by way of ant treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract CGST @ 2.5%”, or Nil and will be taxable @ 2.5% CGST.

CRUX: (i) & (ii) Printing of pre/Post-examination items is a supply of services classifiable under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 12/2017 – Central Tax (Rate), dated 28th June, 2017 as amended.
(iii) In case of railway Tickets/cheque books where the applicant uses their own physical input i.e. paper, then the case is covered under under Heading 9989 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 as amended and is taxable at 6% CGST.