The Karnataka Authority for Advance Rulings (AAR) has held that the supply of printed answer booklets for education institutions would constitute a supply of services.
The applicant, M/s. P K S Centre for Learning stated that they submit a bid in response to the tender floated by the Karnataka Secondary Education Examination Board for the printing of question papers and other examination materials.
Further stated that the Karnataka Secondary Education Examination Board was a statutory body established under the Karnataka Secondary Education Examination Board Act, 1966 to hold and conduct public examinations and the Examination Board falls within the ambit of the term “educational institution” by its nature and functions being discharged by Boards.
The scope of work of the applicant is only to compose, typeset, print, pack, transport, unload and supply sealed Question Papers to the Education Board / Educational Institutes and the same would constitute a supply of service.
It was observed that the printed materials supplied to the Board by the Applicant by the tender conditions are not marketable commodities in the open market and as goods, they have no legitimate value to persons other than the Board, who provides the input content.
The authority viewed that supplying answer booklets, other formats used for and during examinations and envelopes for packing answer booklets printed with the content supplied by the recipient made using physical inputs including paper belonging to the printer, the usage of the products gives its essential characteristic while printing being an ancillary activity and therefore such supplies would constitute the supply of goods falling under respective Headings of Chapter 48 and 49 of the Customs Tariff.
Dr M.P. Ravi Prasad, Additional Commissioner of Commercial Taxes Member (State) and Sri. T. Kiran Reddy, Additional Commissioner of Customs & Indirect Taxes Member (Central) held that the supply of answer booklets and other formats used for and during examinations falls under the heading 4802) and the supply of envelopes for packing answer booklets falls under the heading 4817 are taxable as per entry No. 112 of Schedule Il of Notification No. 1/2017-Centra1 Tax (Rate) and entry 152 of Schedule Ill of Notification No. 1/2017-Central Tax (Rate) respectively. The applicant was represented by Sankari V. Krishnan.
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