The Authority for Advance Ruling (AAR), Tamil Nadu has held that the supply of printed leaflets as per Content supplied by the recipient is a composite supply and attracts 18% Goods and Services Tax.
The applicant, The Coronation Arts Crafts is engaged in printing the content supplied by the recipient using their paper and ink and supplies such leaflet products to the recipient, M/s Hindustan Latex Ltd. (HLL) a government of India enterprise, who in turn supplies the said leaflet product along with their manufactured product.
The leaflet product is supplied by the applicant to the customer charging 12% IGST classifying the supply under SAC heading 9989. Based on the information from the customer, other suppliers are supplying such printed leaflet products charging 5% IGST classifying the same as the supply of goods under chapter heading 4901 of GST Tariff Act 2017.Hence the applicant approached the Authority for clarifying whether HNS heading 4901 or 9989 is applicable on the supply and to clarify the applicable tax rate.
The applicant submitted that the supply made by them is a naturally bundled composite supply, with the supply of printing as the principal supply and thereby the applicable SAC is 9989.
The Authority observed that in the classification of the supply of printed articles, the predominance element plays an important role in the determination of the classification as a supply of goods or as a supply of service. The predominant activity isprintingthe contents of the customer in the required tangible inputs sourced by the applicant as per the requirement of the recipient, hence the principal supply in the considered transaction is ‘Supply of service’.
The Authority presided by Smt. K. Latha and Mr. T. G. Venkatesh has held that the printing of content provided by the recipient on the paper and materials of the applicant and supply of such printed leaflets to the recipient is a composite supply as defined under section 2(30) of the CGST/TNGST Act 2017 with ‘Supply of service of printing’ as the principal supply. The said supply is classifiable under SAC 9989 with 18% GST.
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