Order date – 12 August 2022

Facts – 

• The applicant, M/s Bhagyam Binding Works, is a Partnership concern registered under the provisions of the CGST Act, 2017 as well as KGST/SGS.
• The Applicant is proposing to submit a bid in response to the tender floated by the Karnataka Textbook Society (hereinafter referred to as “KTBS”) for the printing of school textbooks as prescribed by the Karnataka State Board.

Issue – 

• Whether KTBS can be classified as “educational institution” for the purposes of applicability of GST on printing services provided to it by the Applicant?
• Whether KTBS can be classified as “State Government” for the purposes of applicability of GST on printing services provided to it by the Applicant?
• Whether the rate of tax being charged at present by the printers on the printing of textbooks supplied to KTBS i.e., @ 12%, is correct or whether any exemptions or lower rate of tax would be applicable on the said contracts for printing and supply of school textbooks.

Order – 

• The authorities observed that KTBS is not an institution providing services by way of pre-school or higher secondary education or education as a part of curriculum or as a part of approved vocational education course, but it is society which is only into supply of textbooks to students. Hence, KTBS cannot be classified as “educational institution”.
• Further, since KTBS is a Society registered under the Karnataka Societies Act, 1960, the same cannot be considered as “State Government”.
• Since the applicant has stated that he provides the materials (physical Inputs) and the content is owned by the KTBS, the applicant is into printing of the content supplied by the recipient of supply and the same is the principal supply. Therefore Rate of tax being charged at present by the printers on the printing of textbooks supplied to KTBS i.e., @ 12%, is incorrect and the same is taxable @ 18% as per entry No. 27 of Notification No.11/ 2017-Central Tax (Rate) dated: 28.06.2017 further amended vide Notification No.6/ 2021-Central Tax (Rate) dated: 30.09.2021.