The Authority for Advance Rulings (AAR) has held that no Goods and Services Tax (GST) shall be applicable to the books sold to Madrassas as it is exempted under the Act.
The applicant is in the business of carrying out manufacturing, designing, printing all types of confectionaries, brochures, stickers, aseptic bags, Tin containers, leaflets, posters, calendars, catalogs, danglers, profiles. They also involved in the printing and selling of religious books for various Islamic educational institutions across India and approached the AAR seeking clarification on the applicability of GST on such sale of books.
Before the bench, the applicant submitted that the supply is made by the applicant to the Madrasas for consideration and the contract is for the Books supply of books for consideration which is covered under sub-section (1) of section 7 of the Central Goods and Services Tax Act, 2017. According to the applicant, there is no direct link between the recipient of books and the supplier of the content, and the final product is supplied to the recipient of books and the content provider has no role to play in the selection of the recipient of the sale. Hence it is a sale simpliciter of books.
After analyzing the relevant provisions of the statute and notifications, the authority observed that the rate of tax applicable on such a supply of books, the printed books are covered under the HSN Code 4901 10 10 and are covered under entry no. 119 of Notification No.2/2017- Central Tax (Rate)dated 28.06.2017 and hence are exempt from tax under the CGST Act, 2017.
“Further they are covered under entry no.119 of Notification (02/2017) No. FD 48 CSL 2017 dated 29.06.2017 and hence exempted from the Karnataka Goods and Services Tax Act, 2017. The inter-State supply of printed books is exempt under the IGST Act, 2017 as they are covered under entry no.119 of Notification No.2/2017 – Integrated Tax (Rate) dated 28.06.2017,” the authority said.
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