IN RE: ASHOK CHATURVEDI
GST
2019 (2) TMI 1008 – AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH – 2019 (21) G. S. T. L. 211 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH – AAR
Dated:- 24-12-2018
STC/AAR/08/2018-Raipur
GST
S/Shri S.K. Buxy, Member (State Tax) and Rajesh Kumar Singh, Member (Central Tax)
ORDER
Proceedings: The applicant M/s. Shri Ashok Chaturvedi, General Manager, Chhattisgarh Text Book Corporation, Pension Bada, Raipur, Chhattisgarh, holding GSTIN 22AAAJC0421F1Z8 has filed the application U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 requesting advance ruling as regards :-
1. Whether the books which the Chhattisgarh Text Book Corporation is supplying as per instruction of School Education Department CG [Loksikshan Sanchnalay] after printing the Syllabus decided by the SCERT would tantamount to supply of goods or supply of Service and fall under HSN Code 4901 zero rated goods.
2. Whether the books which the Chhattisgarh T
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Book Corporation is a registered society under Chhattisgarh Society Registration Act, 1973 which is run by Government and Non-Government officers. Chhattisgarh Text Book Corporation has been provided with the work of publishing and distribution of books for Chhattisgarh State by the Order No. F 10-12/2004/20, dated 13-4-2005 of School Education Department, Chhattisgarh. The aims of Chhattisgarh Text Book Corporation as per the byelaws of Government society is as under: –
1. To improve and promote all types of education especially primary, middle, high school and higher secondary education and to complete all related works.
2. To develop, print, publish and distribute all types of books for school and colleges, books for the teachers, training materials and undertake all related works.
3. To undertake all tasks related to improve academics, valuation issues in educational institutes.
4. To prepare useful literature for educational institutes and its printing, publishing and distrib
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he details in respect of members of the TBC and the member includes the Minister of Education Chhattisgarh Government, Secretary to Education Department Chhattisgarh (IAS) etc.
2. that, Department of Education gives instructions to Chhattisgarh Text Book Corporation to publish and provide books in various governmental schools and further the Text book corporation is even formed to publish the books. Further, while giving the order, the cost of each book is also decided by the Board members in Board meeting which is headed by the Minister (Education) who is also Chairman of CG Text Book Corporation.
3. that, SCERT which is a specific wing of the Government; prescribes the syllabus and the content of the book. The Text Book Corporation gets the syllabus from the SCERT for which it pays royalty to SCERT in lieu of consideration. Thus, the content is owned by the SCERT. Further, in every book being supplied they are duly mentioning the publisher's name i.e. CG Text Book, Content Owne
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e Author i.e. SCERT and get it printed from printing agency and publishes such books for the purpose of distribution in market, and that, the whole process is related to supply of goods and thus falls under the HSN Code [4901] i.e. printed books, wherein the rate of tax is NIL, meaning therein that the supply of printed books is not subject to tax.
8. that, therefore at the cost of repetition, Chhattisgarh Text Book Corporation submits that the whole process of CGTBC can be understood through an example where a very renowned author Mr. J.K. Mittal gets its Hand Book of GST published:
'Mr. J.K. Mittal is a well-known author who wrote the Hand Book on GST Law under his own copyright. The content as given by Mr. J.K. Mittal is then given to Oakbridge Publishing Pvt. Ltd. (herein referred as publishing company) for the purpose of publishing who in consideration pays royalty to Mr. J.K. Mittal. After that, publishing company approaches Saurabh Printers Pvt. Ltd. For printing of such hand
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ion, however, as question 3 and question 4 is related to question 1 and question 2 only, therefore, their main concern is for the 1st two questions only (i.e. question 1 and question 2). Thus the applicant has sought advance ruling only for the 1st two questions.
4. Personal Hearing :-
In keeping with the established principles of natural justice, personal hearing in the matter was extended to the authorized representative of the applicant and accordingly, Mr. J.K. Gupta (CA) and Miss. Deepti Agrawal, Senior Manager (Finance) appeared before us for hearing on 29-11-2018 and reiterated their contention. They also furnished a written submission dated 29-11-2018, which has been taken on record.
The applicant has submitted its registration certificate as approved by Chhattisgarh Society Act, 1973 w.e.f. 11-8-2004. The applicant has submitted society registration certificate, copy of byelaws of society, copy of minutes of Board meeting, copy of sale invoices submitted to the State Gover
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d non-subsidized schools. In case any book is left with the Chhattisgarh Text Book Corporation after distribution, such loss is bearable by Chhattisgarh Text Book Corporation. In case of loss, damage of book, or in case the content provided by the SCERT is incorrect, only Chhattisgarh Text Book Corporation is responsible for such incurred losses.
Thus, in above context, Chhattisgarh Text Book Corporation, the applicant has submitted the application seeking advance ruling on four grounds as mentioned in the application. However as question 3 and question 4 is related to question 1 and question 2 only, therefore, their main concern is for the 1st two questions only (i.e. question 1 and question 2) and have accordingly sought advance ruling only for the 1st two questions.
5. The legal position, Analysis and Discussion :-
5.1 The provisions for implementing the CGST Act anti CGGST Act, 2017 are similar. Now we sequentially discuss the provisions that are applicable in the present case:
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ot below the rank of Deputy Secretary.
(iv) Director Public Education, Chhattisgarh.
(v) Chairman, Chhattisgarh Board of Secondary Education.
(vi) Controller, Government Press, Chhattisgarh.
(vii) Director, State Council of Education, Research and Training.
(viii) Commissioner/ Director, Department of Welfare of Schedule Caste, Schedule Tribe and Other Backward classes.
(ix) A representative as nominated by NCERT.
(x) A Principal nominated by Chhattisgarh School Education Department.
(xi) Three Teachers/ Head Masters/ DIET Principals as nominated by Chhattisgarh School Education Department having knowledge of primary/ middle/higher education.
(xii) Two renowned people in the field of Education as nominated by the Chhattisgarh Government.
5.3 The above members of the Council holds time to time Board meetings for rarifying the price of printed books of various academic classes. For price fixation of the books other expenses like paper and printing cost are also included apart f
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g of books.
(iii) Upkeep of books and distribution to schools.
(iv) Under distribution mainly the work of transportation.
As per the applicant under above mentioned works specified books are being supplied mainly to School Education Department and Rajiv Gandhi Shiksha Mission, as per their specification. Chhattisgarh Text Book Corporation has also stated that the ownership of the books supplied to School Education Department and Rajiv Gandhi Shiksha Mission remains with the applicant only, and it has submitted the following two points to bring home their above contention: –
(i) The annual income of Chhattisgarh Text Book Corporation as per their C.A. audit report has been shown as under :-
Amount in Lacs
Income Source
Year
2013-14
Year
2014-15
Year
2015-16
Year
2016-17
Sale of books
13439.52
11827.00
13019.96
16966.64
Receipts from publishing work
379.20
–
31.44
235.62
Sale of waste paper
–
–
–
6.33
Other sales
–
4.49
3.87
6.32
Total
13818.72
1
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Book Corporation for the above mentioned task in a continuous manner according to which Chhattisgarh Text Book Corporation supplies the books owned and printed by it to School Education Department and Rajiv Gandhi Shiksha Mission every year whose syllabus is being approved by the experts.
Section 2(30) of GST Act defines composite supply as under :-
“Composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;
Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;
Thus from the above it gets clear that Chhattisgarh Text Book Corporation performs the works of publishing and distribution o
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pply of books, printed with logo, design, name, address or other contents supplied by the recipient of such printed goods, are composite supplies and the question, whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply. It is to be noted that in case of composite supplies, taxability is determined by the principal supply. Here from the details put forth by the applicant before us, we observe that had it been the case where the printer of books engaged by Chhattisgarh Text Book Corporation for getting the books printed where only the 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 belongs to the printer, supply of printing [of the content supplied by the recipient of supply] would definitely qualify being treated as the principal supply and such supplies would constitute supply of service, which
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