Understanding GST on Printing Contracts of Books, Pamphlets, and Brochures

India implemented the Goods and Services Tax (GST) on July 1, 2017, which replaced a complex network of indirect taxes that were levied by the central government and individual states. GST is a comprehensive tax that is levied on the supply of goods and services within the country. With the introduction of GST, there have been some changes in the taxation of printing contracts of books, pamphlets, and brochures. In this article, we will examine these changes in detail.

Introduction

A printing contract is an agreement between two parties where one party (the printer) agrees to print material for the other party (the client). This material can include books, pamphlets, brochures, or any other printed material. In the pre-GST era, printing contracts were subject to a variety of taxes, including central excise duty, state VAT, and service tax. However, with the introduction of GST, these taxes have been replaced by a single tax that is levied on the supply of goods and services.

Let us now take a look at how GST impacts printing contracts of books, pamphlets, and brochures.

Applicability of GST

Printing contracts of books, pamphlets, and brochures are considered to be supply of services and are therefore subject to GST. The rate of GST applicable on printing contracts is determined by the nature of the contract and the type of material being printed.

If the printed material contains only text, then it is classified as a “book” and is subject to a GST rate of 12%. On the other hand, if the printed material contains text as well as pictures, then it is classified as a “brochure” and is subject to a GST rate of 18%. Pamphlets are also subject to a GST rate of 18%.

Input Tax Credit (ITC)

Under the GST regime, businesses are eligible to claim Input Tax Credit (ITC) on the taxes paid on goods and services that are used in the course of their business. This includes the taxes paid on printing contracts of books, pamphlets, and brochures.

However, there are some conditions that must be met in order to claim ITC. Firstly, the business must be registered under GST. Secondly, the taxes paid on the printing contract must be reflected in the business’s books of accounts. Thirdly, the printed material must be used for the furtherance of the business.

Conclusion

In conclusion, the introduction of GST has brought about some changes in the taxation of printing contracts of books, pamphlets, and brochures. These contracts are now subject to a single tax that is levied on the supply of goods and services. The rate of GST applicable on printing contracts depends on the nature of the contract and the type of material being printed. Businesses that are registered under GST are eligible to claim Input Tax Credit on the taxes paid on printing contracts, provided that the taxes are reflected in their books of accounts and the printed material is used for the furtherance of the business.