In Re : M/s Sonka Publications (India) Private Limited
GST
2018 (5) TMI 594 – AUTHORITY FOR ADVANCE RULING – DELHI – 2018 (14) G. S. T. L. 414 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING – DELHI – AAR
Dated:- 6-4-2018
Advance Ruling No. 05/DAAR/2018
GST
Pankaj Jain Member (Centre) and Vinay Kumar Member (State)
Present for the Applicant: Shri Vineet Bhatia, Advocate
Present for the Revenue (Centre): Shri Neeraj Aneja, Superintendent, Division Janakpuri, GST West, New Delhi
Present for the Revenue (State): None
Statement of Facts as per the Applicant:
The applicant is a Publishing House and engaged in the business of publishing and selling of books for students of various classes.
2. The applicant has got registered under the Central Goods and Service Tax Act and is holding GSTIN No. 07AAACS2232H1ZQ.
3. That besides many of its other publications, the applicant is also publishing books by the name of 'Sulekh Sarita Part-A' (सुले
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on Question No. 1:
6. The books 'Sulekh Sarita Part-A' (सुलेख सरिता भाग – अ), 'Sulekh Sarita Part-B (सुलेख सरिता भाग – ब)' and 'Sulekh Sarita Part-1-5 (सुलेख सरिता भाग – 1 से 5)' are classifiable as 'Printed books' falling under 'HSN 4901'.
7. That whereas 'exercise books'/ 'writing books' simply contains sheets of lined paper, commonly known as 'note books' for practising and are used by students for taking down notes or for practising written contents and/or solving problems. Thus 'exercise books' generally do not contain any instructions and are merely compilation of plain papers with lines printed on them. The printing of lines on the plain paper is merely for enabling the students to write in a straight manner. Merely printi
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This book teaches 'MATRAS' with the concept of “उच्चारण के आधार पर मात्राओं का ज्ञान” with comparison of words and picture presentation. The concept helps the child to learn Hindi 'MATRAS' in the easy way, thus making the Hindi subject easier for the child.
c. The printed matter given in these books are also aimed at-
(i) Teaching the students about various prominent idioms i.e. (मुहावरों का ज्ञान करवाना)
(ii) Teaching the students about the art of word formation i.e (शब्द निर्माण सिखाना)
(iii) Improving the vocabulary of the students i.e. (हिन्द&#
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#2350;े क्या सिखाती है; मुझे सदा याद रखना है आदि का मूल उदेश्य बच्चों को वो संस्कार प्रदान करना है जो जीवन मे उनके काम आएं और वे एक अच्छा इंसान बनने मे उनकी मदद करे।” have been provided in the book with the objective to inculcate ethos and values in the minds of
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ain any content as such.
14. The basic edition of i.e. 'Sulekh Sarita Part-A (सुलेख सरिता भाग – अ)', 'Sulekh Sarita Part-B (सुलेख सरिता भाग – ब)' also qualify to be a 'picture book' falling under HSN 4903. These books, alternatively, even otherwise would be exempt from tax falling either under HSN 4901 or 4903. The primary level books of 'Sulekh Sarita Part 1-5' definitely qualify to be 'printed books' falling under HSN 4901.
15. Regarding, the relevance and importance of these books it is mentioned as these books are the first books which a child holds while beginning his process of learning. In the formative years the endeavour is to make learning a fun exercise for a child and therefore, the basic pre-nursery/ nursery and primary books are designed in such a manner that a child gets attracted towards them. For this
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books (including educational workbooks sometimes called writing books), with or without narrative texts have been classified to be 'printed books' falling under HSN 4901.
18. It is a settled law that the principle of ejusdem generis can be applied while interpreting entries in a taxing statute and the words or expressions in a entry derives its meaning, colour and characteristics from the preceding and succeeding words. A particular section of the statute shall not be divorced from the rest of the Act. The Ejusdem Generis rule applies to resolve the problem of giving meaning to groups of words where one of the words is ambiguous or inherently unclear. Even otherwise when the principle of ejusdem generis is applied to these HSN codes then the meaning of 'exercise books' and 'printed books' becomes clear. It can be noticed that the word 'exercise books' (In HSN 4820) is preceded by the word “registers, account books, note books, order books, receipt books, letter pads, diaries and simil
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from where he makes a taxable supply, if his aggregate turn over in a financial year exceeds the taxable quantum of Rs. 20.00 lacs.
20. Section 23 of the CGST Act deals with person who is not liable for registration. As per Section 23 (1) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or are wholly exempt from tax then the person is not liable itself to register. Section 23 of the GST Act is reproduced here under for ready reference and the same reads as under:
Section 23(1): The following persons shall not be liable to registration, namely:-
(a) Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the integrated Goods and Services Tax Act.
(b) An agriculturist, to the extent of supply of produce out of cultivation of land.
21. Section 24 of the CGST Act deals with compulsory registration in certain cases
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Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person;
(xii) Such other person or class of persons as may be notified by the Government on the recommendations of the Council.
22. The issue for decision is that in case person engaged exclusively in supply of goods that are not liable to tax or wholly exempt from tax (say for example 'printed books' or fresh vegetables or fruits) but is also availing the services of Goods Transport Agency or an Advocate and thus liable to pay tax under reverse charge then whether such a person is liable for registration or not?
23. From a plain reading of Section 24 it can be noticed that the opening word of Section 24 states “Notwithstanding anything contained in the sub-section (1) of section 22”. Thus, it can be noticed that section 24 specifically overrides the provision of section 22 (1), which prescribe the threshold taxable quantum. How
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eading of section 22, section 23 and section 24, it appears that section 24 does not override section 23, which is an independent code in itself and thus a person dealing exclusively in supply of goods or services or both that are not liable to tax or wholly exempt from tax would not be required to take a registration under the GST Acts.
Prayer of the Applicant:
27. That the product supplied by the applicant i.e. 'Sulekh Sarita Part-A', 'Sulekh Sarita Part-B' and 'Sulekh Sarita Part 1-5' be classified as 'printed books' falling under HSN 4901 or as 'picture books' falling under 'HSN 4903' and consequently covered by entry No. 119 or 121 of Notification No. 2/2017 – Central Tax (Rate).
28. That the applicant is not liable for registration, if it is engaged in supply of goods or services that are not liable to tax or wholly exempt from tax under the GST Acts.
Comments of Jurisdictional Officer (Centre):
29. With respect to Question No. 1:
CBEC vide Circular No. 1057/6/2017-CX dated
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e members of the trade requesting clarification regarding classification of printed workbooks, exercise books, children's drawing book etc. The issue raised in these representations is whether the aforesaid goods are classifiable under Chapter 48 or Chapter 49 of the erstwhile Central Excise Tariff Act (CETA), 1985. Issue was also litigated before the Hon'ble High Court of Delhi. The Hon'ble High Court directed Board to examine the matter and pass appropriate order at its earliest convenience.
(ii) The issue has been examined. Exercise Books have been explained in HSN under explanatory note (2) to Heading 48.20 as, “These may simply contain sheets of lined paper but may also include printed examples of handwriting for copying in manuscript”. Such exercise Books are specifically classified under heading 4820 of the erstwhile CETA, 1985. These are nothing but stationary items having blank pages with lines for writing and may also include printed texts for copying manually. In common par
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s for completion in manuscript)…” Thus, printed work books containing questions followed by spaces for writing or other exercises would fall within the scope of Chapter 49. The said goods are different from Exercise Books falling under Chapter 48 which are stationary items with blank pages with lines for writing and some time may also include printed texts for copying manually, as explained in the preceding para. Further, since printing in case of printed workbooks is not merely incidental to the primary use of the of the goods, such goods are classifiable under Chapter 49, in terms of Chapter note 12 to Chapter 48 of erstwhile CETA, 1985.
(iv) Similarly, HSN Chapter note (6) to Chapter 49 read with HSN explanatory note under heading 49.03 covers children's workbooks consisting essentially of pictures with complementary texts, for writing or other exercises, and children's drawing or colouring books, provided the pictures form the principal interest and are not subsidiary to the tex
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e main issue for decision in this case is whether the books 'Sulekh Sarita Part-A', 'Sulekh Sarita Part-B' and 'Sulekh Sarita Part 1-5' are classifiable as 'Printed Books' falling under HSN 4901 or as children's 'Drawing Books' under HSN 4903 or as 'Exercise Books' under HSN 4820.
36. The HSN notes for Heading 4820 reads as under:
48.20- Registers, account books, note books, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting-pads, binders (loose-leaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collection and book covers, of paper or paperboard.
4820.20 – Exercise books
(2) Exercise Books. These may simply contain sheets of lined paper but may also include printed examples of handwriting for copying in manuscript.
Educational workbooks, sometimes called writing books, with or without narrative texts,
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y works of all kinds, text-books (including educational workbooks sometimes called writing books), with or without narrative texts, which contain questions or exercises (usually with spaces for completion in manuscript); technical publications; books for reference such as dictionaries, encyclopaedias and directories (e.g., telephone directories, including “yellow pages”): catalogues for museums and public libraries (but not trade catalogues); liturgical books such as prayer books and hymn books (other than music hymn books of heading 49.04); children's books (other than children's picture, drawing or colouring books of heading 49.03). Such books may be bound (in paper or with soft or stiff covers) in one or more volumes, or may be in the form of printed sheets comprising the whole or a part of the complete work and designed for binding.
Heading 4901 also covers:
Bound picture books (other than children's picture books of heading 49.03).
The heading 49.01 further excludes:
(a) ….
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the sense of stories is conveyed by a series of episodal pictures, accompanied by captions or summary narratives related to the individual pictures. It also includes children's workbooks consisting essentially of pictures with complementary texts, for writing or other exercises.
This heading also includes children's drawing or colouring books. These consist mainly of bound pages (sometimes in the form of detachable postcards) containing simple pictures for copying, or outlines of pictures, with or without printed instructions, for completion by drawing or colouring; sometimes coloured illustrations for guidance are incorporated. They also include similar books with “invisible” outlines or colour which can be made visible by rubbing with a pencil or applying water with a paint brush, and also books in which the small amounts of water colour required for colouring are contained in the books (e.g., in the form of a palette).
39. The issue of classification of text books and printed wor
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ues, prayer books etc. The heading 49.01 specifically covers educational workbooks or writing books.
(ii) Heading 49.03: This heading generally covers children's picture, drawing or colouring books wherein pictures form the principal interest in the books.
(iii) Heading 48.20: This heading generally covers stationery books. However, exercise books are specifically covered in this heading. Such exercise books may contain simple sheets with printed lines or may even have printed examples of handwriting for copying by the students.
42. In the case of certain goods of heading 49.01 e.g workbooks, there may be space for writing in addition to the printed text but printing is of primary use and space for writing is incidental. On the contrary, in case of certain goods of heading 48.20 e.g. diaries, exercise books, there may be considerable amount of printed matter but the printing is incidental to their primary use of writing by hand.
43. It is observed that the main feature which differ
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their classification under heading 48.20 as exercise books. Further, since, none of the books contain any pages with children's picture, drawing or colouring matter, classification of any of them under heading 49.03 is not possible. Hence, the goods are to be correctly classified under HSN 4820.
46. Regarding, Sections 22, 23 and 24 of CGST Act, 2017 dealing with registration, it is observed that the section 24 deals with compulsorily registration in certain cases. The section 24 requires that if a person is required to pay tax under reverse charge, then he is compulsorily required to get registered. The contention of the applicant that the persons who are engaged exclusively in supply of goods and services that are exempt or not liable to tax shall not be required to take registration is not correct because without registration payment of tax under reverse mechanism would not be possible. The Sections 22, 23 and 24 have to be read together and from the combined reading of the same i
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