The West Bengal Authority for Advance Ruling (AAR) held that supplies of composite printing services to a recipient located in India are taxable and cannot be considered as export services.
The Applicant supplies the composite printing services to the recipient located in India. Such supplies are not, therefore, export of services within the meaning of section 2(6) of the IGST Act,2017. lt is taxable under Notification No. 11l2017 Notification No. 812017 – lT Rate.
The Applicant, stated to be engaged primarily in the business of printing, seeks a ruling on whether the activities undertaken by procuring orders from a foreign buyer to print texts and thereafter deliver them to various places in India is a taxable transaction. Advance Ruling is admissible on this question under section 97(2)(e) of the GST Act.
The Applicant submitted that the question raised in the Application is neither decided by nor pending for decision before any authority under any provisions of the GST Act. The officer concerned raised no objection to the admission of the Application. The Application was, therefore, admitted.
The Applicant also contended that the Hope Foundation lnc, a foreign entity based in the United States of America, awards for printing booklets in various Indian languages. Hope Foundation lnc provides the content. The Applicant arranges physical inputs like paper, ink, and other physical inputs, prints the content and binds the printed material into booklets and delivers the booklets to the recipient. lt receives consideration in US dollars.
The Applicant submits that the recipient is located outside India and consideration received in convertible foreign exchange, the activity should be considered as export of service.
The bench including Joint Commissioner, Susmita Bhattacharya and Senior Joint Commissioner, Parthasarathi Dey pronounced the order based on an application filed by Swapna Printing Works Private Limited.
Section 93(3) elaborates as and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply. Recipient shall also include an agent acting as such on behalf of the recipient in relation to the goods and/or services supplied.
Authority observed the context of a supply involving payment of consideration, a ‘recipient’ of supply of goods or services means the person who is liable to pay the consideration and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied.
The Authority said that the ‘recipient’ is, therefore, so defined as to make separation impossible between the person to whom the supply is made and the one liable to pay the consideration and when no consideration is involved, the recipient can only be the person to whom the service is rendered. The person who receives the supply in India should, therefore, be considered as the recipient, being inseparable from the foreign buyer as far as the Applicant’s supply is concerned.
The WBAAR ruled that the composite printing service to the recipient located in India. Such supplies are not, therefore, the export of services within the meaning of section 2(6) of the IGST Act,2017 is taxable.
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