Books to teach children exact formation of Hindi letters particularly the ‘Matras’, as also prominent idioms and counting / writing, merit classification under HSN 4820 as “Exercise Books” liable to GST at 12%; Rejects applicant’s stand that said books would fall either under HSN 4901 as “printed books” or under HSN 4903 as “Children’s picture books”, exempt from GST in terms of Notification No. 2/2017-Central Tax (Rate);
Observes that CBEC had issued guiding principle for classification of such books under Central Excise Tariff Act vide Circular No. 1057/6/2017-CX and accordingly, the main feature which differentiates ‘Work Books’ of Heading 4901 from ‘Exercise Books’ of Heading 4802 is that former contain questions or exercise with space for writing answers, whereas the latter contain printed texts with space for copying manually;
In present case, the primary use of applicant’s books is writing and printing is incidental, therefore presence of printed text does not affect their classification as ‘Exercise Books’, observes AAR while further stating that “since, none of the books contain any pages with children’s picture, drawing or colouring matter, classification of any of them under heading 49.03 is not possible”; As regards the question of registration, on a combined reading of Sections 22, 23 and 24 of CGST Act, AAR holds that applicant is required to take registration if has GST liability under reverse charge mechanism as there is no threshold exemption therefor : Delhi AAR
Citation: TS-178-AAR-2018-NT