Modern Art & Printers Pvt. Ltd., was incorporated on 12th January, 2020, having main object of the business of supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes etc. These wou

Supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons, boxes, etc. which are being printed with logo, design, name, address or other contents supplied by the recipient of such printed goods, are in the nature of composite supplies and the issue relating to whether such supplies constitute supply of goods or services under GST is to be determined on the basis of what constitutes the principal supply in such goods. Principal supply has been defined in section 2(90) of the CGST Act, 2017 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. The issue in hand had been clarified by the Government vide Circular No. 11/11/2017-GST dated 20.10.2017. In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied to the publisher by the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belongs to the printer. Supply of printing (of which 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 under GST. In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper etc. printed with design, logo etc. supplied by the recipient of goods made using physical inputs including paper belonging to the printer, fall under Chapter 48 or 49 of the Customs Tariff Act, 1975. The predominant supply is that of goods and the supply of printing and the contents for printing (though supplied by the recipient of supply) is ancillary to the principal supply of goods. Therefore such supplies would constitute supply of goods falling under respective headings of Chapter 48 or 49 of the Customs Tariff Act, 1975. Modern Art & Printers Pvt. Ltd. is therefore advised to act accordingly by taking the supply of printing of various products as a supply under GST and to tax the same on the basis of Composite Supply.