Supply of ‘Access Cards” are liable to GST: AAR [Read Order]

Electronic Cards - RBI - Taxscan

The Authority of Advance Ruling ( AAR ), Karnataka has ruled that the supply of ‘access cards”, and similar material printed by the applicant with the contents supplied by the recipient of supply are classifiable under SAC  9989 and liable to tax under CGST at 9%, KGST at 9% and at 18% under the IGST  Act.

The Applicant is engaged in the printing industry and is also a manufacturer of cartons, corrugated boxes, paper folders, sleeves, other packaging containers, labels, tags, pamphlets, booklets, brochures, leaflets and similar printed matter on order. Content to be printed is supplied by the customer and all the raw materials required for printing belong to the applicant. The content is printed and supplied.

The applicant is supplying ‘Access Card’ to a customer by the name of M/S. Trilok Security Systems India Pvt. Ltd. on their specific requirement and all the contents to be printed on the ‘Access Card’ are provided by the said customer. The applicant submitted that what they called as ‘Access Card’ was only a printed matter issued to pilgrims free of cost by temple viz. Tirumala Tirupati Devasthanams, Shri Shiv Khori Shrine Board and other temples, which contain information regarding distance to the temple, precautions to be taken by pilgrims who are old, sick physically weak, first aid centers and certain restrictions on the movement of pilgrims. It is used for security reasons and it stipulates and restricts the staying time of pilgrims inside the temple area. ‘Access Card’ is issued in public interest with social messages and it is non-commercial in nature i.e., neither promotes trade nor commerce.

The applicant further submitted that on implementation of Goods and Service Tax Act, 2017, with effect from 01.07.2017, the goods are classified under HSN Code and divided into different schedules for the purpose of levy of GST. Accordingly, the description of goods falling under I-ISN code 4901 10 20 is similar to the description provided.

The Applicant had sought advance ruling on classification of goods and services is as under the ‘Access Card’ being printed and supplied by applicant is classifiable under HSN code 4901 10 20 with description brochures, leaflets and similar printed matter whether or not in single sheet and rate of tax at ‘CGST 2.5% + SGST 2.5%’ and IGST 5% and applicant is seeking advance ruling.

The coram comprising of Additional Commissioner of Central Tax, Harish Dharnia and Joint Commissioner of Commercial Tax, Ravi Prasad M.P pronounced the order based on an application filed by M/S Pattabi Enterprises.

The authority observed that the involvement of rights to stay in the temple precincts attached to the card and other involvement of privileges can only be issued by the recipient of supply of ‘Access Cards’, the same is to be treated as Composite supply with the supply of services being the principal supply.

The coram further observed that Section 8(1)(a) of the Central GST Act mandates that in case of a composite supply comprising of two or more supplies, where one of these supplies is the principal supply, such composite supply shall be treated as a supply of such principal supply. The supply made by the applicant thus amounts to a supply of service and not the supply of goods, as envisaged by the applicant.

The Authority further clarifies that the supply of ‘access cards”, and similar material printed by the applicant

the contents supplied by the recipient of supply are classifiable under SAC  9989 and liable to tax under CGST at 9%, KGST at 9% and at 18% under the IGST  Act.

Subscribe Taxscan Premium to view the Judgment
taxscan-loader