Access card printed and supplied by the appellant based on the contents provided by their customers is supply of goods and is rightly classifiable under HSN code 4901 10 20 under the description brochures, leaflets and similar printed matter whether or not in single sheet.
The access card printed and supplied by the appellant attracts GST rate of 5% in case of interstate supplies and 2.5% CGST and 2.5% SGST in case of intra state supplies vide. SL. No. 201 of Sch I of Notification No. 1/2017-CT (Rate) and 1/2017 – IT (Rate) both dated 28.06.2017
Government has issued circular no. 11/11/2017-GST dated 20th October 2017 to provide clarification on taxability of printing contracts under GST.
Circular didn’t clarify taxability of “printed access cards” or “leaflets”.
The appellate authority for Advance Ruling (Karnataka) in case of Pattabi Enterprises observed undoubtedly the contents and the creatives for the access card have been supplied by the recipient to the appellant and there is no dispute that the appellant has used his own paper and inks and machinery to carry out the activity. However, what has been lost sight of is the fact that the activity of printing brings into existence a specific new product known in the trade and common parlance as the access card.
Therefore, the authority was on a conclusion that the printing service is not the principal supply in this case but the supply of access card (i.e. supply of goods) which is product emerging out of the printing activity.