Under the new system, cartons, boxes, bags, packing containers of paper, miscellaneous goods of paper such as cards, catalogue, printed material (Chapter 49 of tariff)  and other related items, effective 1 October 2021 will attract 18% GST instead of the previously levied 12%. Likewise, major changes in relation to rates and scope of exemption on services in respect of printing and reproduction services of recorded media where content is supplied by the publisher (to bring it on parity with colour printing of images from film or digital media) will now be charged at 18% instead of the previously 12%.

Reacting to the news, the print and packaging industry has responded to the GST Council’s tweak with a terse "good", saying, "no confusion over classification". Everything is a uniform 18% now.” Tushar Dhote, director of Dhote Offset Technokrafts, said, “At least the confusion over the HSN code and rates will finally go away. I know of some small printers who were charging a flat 18% on any printed material, especially the printers, who are doing only labour jobs.”

However, things are not so simple. The last time the overall effect was about 4.95%, said a publisher. “It was a mess getting used to it.” Another said, this extra 6% on top... can only be helped if books are made taxable. “Right now components are taxable but the final product is tax-free.”

Further in an advisory for taxpayers regarding the generation of e-Way bill where the principle supply is supply of services, the GST Council modifying the Rule 138 of CGST Rules, 2017, which inter alia, stated, “Information to be furnished prior to commencement of movement of goods and generation of e-way bill. (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees…. Thus, e-Way bill is required to be generated for the movement of Goods” states that commencing 1 October 2021, “where the principal supply is purely a supply of service and involving no movement of goods, the e-way bill is not required to be generated.”

However, in cases where along with the principal supply of service, movement of some goods is also involved, e-Way bills may be generated. Such situations may arise in cases of supply of services like printing services, works contract services, catering services, pandal or shamiana services, etc. In such cases, e-Way bills may be generated by entering the details of HSN code of the goods, along with SAC (Service Accounting Code) of the services involved.

This GSTN issue on generating e-Way bill has been a niggle since 17 March 2021 when a change in the system for generating of E-way Bill was made, wherein no e-way Bill could be generated only for SAC Code and one had to mention at least one  HSN Code for validating and generating the e-way bill.  

“Businesses in the printing industry who undertake orders for the supply of their goods under SAC code were an affected lot - wondering on the process to be adopted for generating the e-way bill as they could not mention the HSN Code in the E-way Bill (as the products are to be supplied under the SAC as per the Board’s clarifications). Nor can they take the risk of supplying what essentially is the ‘goods’ without generating the -Way Bill. The same caused a lot of confusion in the industry and there was no clarity on the process to be adopted to tide over this problem,” said Iqbal Kherodawala, president, BMPA.

A solution had to be obtained, and it could only come via suitable amendments in the procedure that could be issued by the Central Board for Indirect Taxes and Customs (CBITC) and the GSTN. Kherodawala said, “Members of the Managing Committee of BMPA were entirely seized by this issue. Print buyers were also wholly invested into this new complex.”

Kherodawala put together a sub-committee comprising Faheem Agboatwala, Mehul Desai and Saubhagyanidhi Seksaria to highlight concerns and challenges faced by the industry to the CBITC. Additionally, BMPA also sought expert advisory and support from senior Advocate Shailesh Sheth of SPS Legal to represent the matter with CBITC.

The new advisory on the generation of EWB is a result of BMPA’s intervention in the matter, said Seksaria, a member of the sub-committee, the association put together to tackle the issue. “With further coordination and communication and within an interlude of less than six months, the outcome is relieving with a suitable directive now at hand,” Seksaria concluded.

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Please share your thoughts and comments on the GST and e-Way Bill simplification to: noel@haymarketsac.com