GST Registration Mandatory If a Person is liable to pay Tax under Reverse Charge Mechanism: AAR [Read Order]

The Authority For Advance Rulings ( AAR ), Delhi has held that the presence of printed text doesn’t affect the classification of appellant’s book under heading 4820 as exercise books. It further clarified that the registration under GST is mandatory if there is GST liability under reverse charge mechanism irrespective of the situation that there is no liability to pay GST as supplier of Goods and/or Services.

The applicant, Sonka Publications (India) Private Limited, is a body corporate engaged in the publication of children’s books. These books are aimed at improving the handwriting of children and to teach them the exact formation of Hindi letters. The book contains printed text as well as blank spaces for the children to manually copy the words into the blank spaces provided. The applicant claims that the books gives children a foundation in Hindi writing.

The questions raised before the authority is whether the books published by the applicant are classifiable as ‘Printed Books’ falling under HSN 4901 or as children’s ‘Drawing Books’ under HSN 4903 or as ‘Exercise Books’ under HSN 4820 and whether persons engaged exclusively in the business of supplying goods or service or both not liable to tax or wholly exempt from tax are liable to register under GST or not.

The Authority comprising of Members Pankaj Jain and Vinay Kumar observed that in most of the pages there were printed texts in which the child is to copy by joining dotted text or by writing in the space provided, once or several times in the space provided. They noted that only very few pages had printed questions given and thus it held that presence of printed tax doesn’t affect their classification as exercise books. Regarding the second question of registration under GST, the Authority found that Section 24 Central Goods and Services Tax, (CGST) 2017 requires a person liable to pay tax under reverse charge to register compulsorily. Reading Section 22,23 & 24 of the CGST Act together, the authority held that the applicant is required to take registration if it has GST liability under reverse charge mechanism.