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12% GST applicable to Printing and Supply of Trade Advertisements: AAAR [Read Order]

12% GST - applicable on printing - supply of trade advertisements - AAAR - Taxscan

The Karnataka Appellate Authority of Advance Ruling (AAAR) ruled that 12% GST is applicable on printing and supply of trade advertisements.

The applicant, M/s Macro media Digital Imaging Pvt. Ltd. is engaged in the business of printing of trade advertising material like Billboards, Building Wraps, Fleet Graphics, Window Graphics, Trade Show Graphics, Office Branding, In-store Branding, Banners, Free Standing Display Units and Signage Graphics, for which required raw materials such as poly vinyl, flex, paper, cloth printing inks etc., are procured by themselves. The activity of printing is based on specifications provided by the clients in terms of design, size, material etc.

The applicant sought the advance ruling on the issue of whether the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of goods.

The question raised by the appellant was what is the classification of such trade advertisement material if the transaction is supply of goods.

The other issue raised was what is the classification and applicable rate of CGST on the supply of such trade advertisement material if the transaction is that of supply of service.

The AAR ruled that the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of service. The classification of aforesaid supply of service is 9989 of the scheme of classification of services.

The AAR further ruled that the applicable rate of GST on the supply of aforesaid service is 18% up to 30.10.2017 and 12% effective from 31.10.2017, as per Entry No.27 of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended.

The two member bench of D.P. Nagendra Kumar and M.S. Srikar set aside the ruling of the lower authority and held that the transaction of printing of content provided by the customer, on Poly Vinyl Chloride (PVC) banners and supply of such printed trade advertisement material is supply of goods.

The AAAR further ruled that The trade advertisements printed and supplied by the appellant is classifiable under Chapter Heading 491110 of the Customs Tariff Act and attracts GST rate of 12% in case of inter-state supplies and 6% CGST and 6% SGST in case of Intra state supplies vide SI.No 132 of Schedule II to Notification No. 1/2017-IT (Rate) & 1/2017-CT (Rate) both dated 28.06.2017 respectively.

‘Not applicable since the transaction is held to be a supply of goods,’ the AAAR ruled.

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