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This circular clarifies the taxability of printing contracts for items like books, brochures, envelopes, and boxes when printed with content supplied by the recipient. Such contracts are composite supplies. For items like books, pamphlets, and annual reports where the printer supplies the physical paper and the recipient supplies only the content, the supply of printing is the principal supply. This makes it a supply of service under heading 9989. For items like envelopes, letter cards, printed boxes, and tissues where the printer supplies the physical paper, the predominant supply is that of goods. This makes it a supply of goods under Chapter 48 or 49.
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Circular No. 11/11/2017-GST
F. No. 354/263/2017-TRU Government of India Ministry of Finance Department of Revenue Tax research Unit
North Block, New Delhi 20th October 2017
To,
The Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/ Commissioner of Central Tax (All) / The Principal Director Generals/ Director Generals (All)
Madam/Sir,
Subject: Clarification on taxability of printing contracts
Requests have been received to clarify whether supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc., printed with design, logo, name, address or other contents supplied by the recipient of such supplies, would constitute supply of goods falling under Chapter 48 or 49 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) or supply of services falling under heading 9989 of the scheme of classification of services annexed to notification No. 11/2017-CT(R).
In the above context, it is clarified that supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc. printed with logo, design, name, address or other contents supplied by the recipient of such printed goods, are composite supplies and the question, whether such supplies constitute supply of goods or services would be determined on the basis of what constitutes the principal supply.
Principal supply has been defined in Section 2(90) of the Central Goods and Services Tax Act as supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.
In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services.
In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc. falling under Chapter 48 or 49, printed with design, logo etc. supplied by the recipient of goods but made using physical inputs including paper belonging to the printer, predominant supply is that of goods and the supply of printing of the content [supplied by the recipient of supply] is ancillary to the principal supply of goods and therefore such supplies would constitute supply of goods falling under respective headings of Chapter 48 or 49 of the Customs Tariff.
Difficulty if any, in the implementation of the circular should be brought to the notice of the Board. Hindi version would follow.
Yours Faithfully,
Rachna
Technical Officer (TRU) Email: rachna.irs@gov.in
