MMS webinar tries to simplify GST rates

The MMS session on 19 October was a master class on taxability of printed products under HSN as well as taxability of printing contracts under SAC - along with changes upto date. The speakers who addressed the gathering were Kiran Garkar (CA) and Ajay Wadke (CA and Association Consultant).

22 Oct 2021 | By Noel D'Cunha

The webinar provided information about GST for printed products and services, from fundamentals to all the changes that have taken place from its inception in 2017 till date. It covered Chapter 48, 49 - HSN, SAC 9989 and Job Work SAC 9988.

As Uday Dhote who moderated the session said, All of us know that printing activity per se is being charged to GST under the following two types: As printed products under HSN (homogenised system of nomenclature) and printing contracts / services under SAC (service accounting code).

Printing contracts - two scenarios
Talking about job work, where "the physical inputs (paper) belong to others", the experts said in relation to printing/ any treatment or process on goods in relation to printing of goods falling under Chapter 48 & 49, "this would be covered under supply of services under SAC 9988."

Then there are the physical inputs (including paper) which belong to the printer. The experts said where the contents are supplied by the client, "These are composite supplies and can be HSN or SAC 9989 depending on the predominant element." The experts added, where the contents belong to the printer, "these qualify under supply of goods - HSN."

The experts also spoke about composite supplies and whether it is under HSN or SAC 9989?

Their explanation was books, brochures, annual reports, Item 2 calendars, etc under Chapter 49, "since contents are supplied by the person having its usage rights, (therefore) supply of printing is the predominant element and hence, such contracts would classify under supply of services under SAC 9989."

Meanwhile envelopes, letter cards, printed boxes, labels, etc are under Chapter 48. The experts stated, "here even though design, logo, etc are supplied by the client, printing is ancillary and supply of goods is predominant and hence, such contracts would classify under supply of goods and be subject to
relevant HSN."

Their feedback about the clarification 11 (dated 20 October 2017) was "If the activity of printing gives essential character to the printed product, it will be supply of service". They added,  "if the usage of the product gives essential character & activity of printing is ancillary, it will be supply of goods"

The experts suggested that for convenience and to have a uniform system PAN India, our suggestion was to treat "All products covered under Chapter 48 (where printing is merely incidental) under supply of goods - and all products covered under Chapter 49 (where printing is primary) under supply of service."

The session concluded with FAQs with practical examples from print factories; followed by a Q&A session.

The webinar was presented by World Print Hub which is the digital arm of the Mumbai Mudrak Sangh which has been serving the Print Industry since the past 65 years.