The Karnataka Authority of Advance Ruling (AAR) ruled that no GST is applicable on the supply of books from warehouses located in the USA to customers located in the USA, UK, Canada without such books entering into India.
The applicant, M/s. Guitar Head Publishing LLP is engaged in the business of selling guitar training books in the United States of America, United Kingdom, and Canada through their website. The Ricant sends a soft copy of the book to the printer located in the USA, who in turn prints it and ships it to the customers located in the USA, UK, and Canada.
In another business model, the applicant is having an agreement with Amazon Inc. who through their website “amazon.com” based on the choice of the customers either prints the books and sells it to the consumers on their own account or will share the link to download the ebooks material in an of the electronic devices and pays a royalty to the applicant as agreed between the two parties.
The applicant has sought the advance ruling on the issue whether the supply of books from the warehouse located in USA (non taxable territory) to the customers located in USA, UK and Canada (non taxable territory) without such books entering into India by the applicant are treated as supply under GST.
The other issue raised was whether GST is levied on the shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in USA, UK and Canada (non-taxable territory).
Yet another issue raised was whether printing charges for printing of books charged by the Printer located in the USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant.
It was further asked whether the services received by the applicant from Foreign service provider such as warehousing of printed books located in the USA (non-taxable territory) is taxable under Reverse Charge Mechanism under GST.
The coram of Dr. Ravi Prasad and Mashood Ur Rehman Farooqui ruled that the supply of books from the warehouse located in the USA (non-taxable territory) to the customers located in the USA, UK, and Canada (non-taxable territory) without such books entering into India by the applicant does not amount to supply under GST.
The AAR further added that the shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in USA, UK and Canada (non-taxable territory) are not exigible to GST.
“The printing charges, for the printing of books, charged by the printer located in the USA (non-taxable territory) are taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant,” the AAR said.
The AAR observed that the services received by the applicant from a foreign service provider such as the warehousing of printed books located in the USA (non-taxable territory) are not taxable under Reverse Charge Mechanism under GST.
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