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September 17, 2022

GST on services provided for printing on duplex board

by CA Shivam Jaiswal in GST, Legal Court Judgement

GST on services provided for printing on duplex board

Facts and Issue of the Case

The applicant is stated to be engaged in manufacturing of printed box, mono cartons, labels etc and also undertakes works contract of the same nature. In the process of works contract, the applicant receives only duplex board from its customer on which the applicant undertakes the work of printing, lamination, punching, cutting and other related activities. The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling on applicability of GST rate on works contract (job work).The aforesaid question on which the advance ruling is sought for is found to be covered under clause (a) of sub-section (2) of section 97 of the GST Act. The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act. The officer concerned from the revenue has raised no objection to the admission of the application. The applicant submits that it has been clarified in Circular that job work services supplied to a registered person would attract tax @ 12% and the same would be taxable @ 18% when provided to an unregistered person. The applicant accordingly charges tax @ 12% on job work services provided to registered person and 18% on job work services provided to unregistered persons.

Observation by the Court

The court had gone through the records of the issue as well as submissions made by the authorised representative of the applicant during the course of personal hearing. The applicant is engaged in printing of duplex board which is supplied by its customer. In addition to this, the applicant also undertakes cutting, punching and lamination of the board, so printed, if the same is required by the customer. It has also been submitted by the applicant that such printing is done as per design and specifications provided by the customer. The applicant issues invoices for supply of services. The issue involved in the instant case is to decide the applicable tax rate on such supply provided by the applicant.

To determine the applicable rate of tax on such supply, we first need to decide whether such activities would be regarded as supply of goods or supply of services. Entry No. 3 of Schedule II of the GST Act classifies any treatment or process which is applied to another person’s goods as a supply of services. It is an admitted fact that the applicant carries out printing works on goods (duplex board for the instant case) owned by its customers. Therefore, the activities of printing of duplex board belonging to its customers would be treated as supply of services. It is thus evident that any treatment or process on goods belonging to another person shall be treated as job work if the goods are owned by a registered person. In other words, when such goods are owned by a person who is not registered, the same shall not be regarded as job work.

The court find entry no. 26 that: (i) Services by way of job work in relation to printing of all goods falling under Chapter 48 or 49, which attract State tax @ 2.5 per cent. or Nil is taxable @ 5% [CGST @2.5%+ WBGST @ 2.5%]. (ii) Services by way of job work in relation to printing of all goods falling under Chapter 48 or 49, which attract State tax @ 6 per cent. is taxable @ 12% [CGST @ 6%+ WBGST @ 6%]. (iii) Services by way of any treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract State tax @ 2.5 per cent. or Nil is taxable @ 5% [CGST @2.5%+ WBGST @ 2.5%]. (iv) Services by way of any treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48 or 49, which attract State tax @ 6 per cent is taxable @ 12% [CGST @ 6%+ WBGST @ 6%]. However, manufacturing services on physical inputs (goods) owned by others, which are not covered, inter alia, under point no. (i) to (iv) would attract tax @ 18% [CGST @ 9% + WBGST @ 9%].

On the basis of above, the court  hold that the activities undertaken by the applicant for printing on duplex board belonging to its customer including cutting, punching and lamination, as and when required by the customer, shall be treated as services by way of job work in relation to printing of all goods falling under Chapter 48 where the customer is registered under the GST Act. In cases where the customer is not registered under the GST Act, the same shall be treated as services by way of any treatment or process on goods belonging to another person, in relation to printing of all goods falling under Chapter 48. However, in both the cases, the applicable rate of tax would be 12% [CGST @ 6%+ WBGST @ 6%] as specified at items (ia)(b) and (iia) respectively under entry no. 26 of Notification.

Conclusion

Supply of services for printing on duplex board belonging to the recipient including cutting, punching and lamination of the duplex board, so printed, would attract tax @ 12% [ CGST @ 6% + WBGST @ 6%] irrespective of the recipient of the services is registered under the GST Act or not.

In-re-Anamika-Agrawal-GST-AAR-West-Bengal

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