GST on leaflet printing for clients in the pharmaceutical sector
Facts and Issue of the Case
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.
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 concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted.
The applicant M/s. Hyderabad Security Offset Printers Private Limited is printing leaflets and packing materials of his clients pertaining to pharmaceutical sector. The leaflet contains the literature pertaining to said medicine. The applicant is desirous of knowing the rate of tax on the services supplied by them. Hence this application.
Observation by the Court
The applicant is printing leaflets and packing materials of his clients pertaining to pharmaceutical sector. The leaflet contains the literature pertaining to said medicine.
| (2) | (3) | (5) | ||
| Heading 9989 | (i) Services by way of printing of newspapers, books (including Braille books), journals and periodicals, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer. – (ii) Other manufacturing services; publishing, printing and reproductionservices; materials recovery services, other than (i) above. | – |
The applicant is providing services of printing but this activity of printing does not fall under item
(i) of heading 9989 i.e., printing of newspapers, books (including Braille books), journals and periodicals and hence is covered under Heading 9989 (ii) of Notification No.11/2017-Central Tax (Rate), dated: 28-06-2017 as amended and is taxable at 9% CGST & 9% SGST.
Further, by amended Notification No. 31/2017 – Central Tax (Rate) dt 13.10.2017 the following entry was introduced at serial no. 26 with chapter heading 9988 at sub item (iia)
“(iia) 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 CGST @ 6per cent.”
In light of the above amended entry, it is clarified that where the applicant uses physical input, i.e., paper supplied by their client for the purpose of goods falling under chapter 48 or 49 of customs taxable @6% CGST then the same will be taxable at 6% under CGST.
Conclusion
| Questions | Ruling |
| What is the rate of tax including HSN code for printing of leaflets? | a. Where the physical inputs are used by the applicant, the activity falls under S.No. 27(ii) of the Notification No. 11/2017 and hence is liable to be taxed @9% CGST & SGST each. b. Where the physical inputs are supplied by the recipient of services, the activity falls under S.No. 26(iia) of Notification No. 11/2017 as amended on 13.10.2017 and same is taxable @6% CGST & SGST each. |
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