GST on simplified printing and packaging; BMPA’s intervention on the e-Way invoice bears fruit

Packaging converters, printers and publishers could be in line for simplified tax plate and e-Way invoice generation following the recommendation of the 45th GST Council meeting held on September 16 2021 in Lucknow, Uttar Pradesh.

Under the new system, cartons, boxes, bags, paper packaging containers, miscellaneous paper products such as cards, catalogs, printed matter (Chapter 49 of the Tariff) and other related items, effective October 1, 2021, will be subject to 18% GST instead of the 12% previously levied. Similarly, major changes to the rates and extent of the exemption for services relating to the printing and reproduction services of recorded media whose content is provided by the publisher (to put it on par with the printing color images from film or digital media) be charged at 18% instead of 12% previously.

Reacting to the news, the printing and packaging industry responded to the GST Board’s change with a terse “good”, saying “no confusion over classification”. Everything is even at 18% now. Tushar Dhote, Director of Dhote Offset Technokrafts, said, “At least the confusion over HSN code and tariffs will finally go away. I know of a few small printers who charged an 18% flat rate on any printed material, especially the printers, who only do labor work. »

However, things are not that simple. Last time, the overall effect was around 4.95%, an editor said. “It was a waste of getting used to.” Another said that that extra 6%…can only be helped if the books are taxed. “Currently, the components are taxable, but the end product is tax-exempt.”

Further, in a notice to taxpayers regarding the generation of an e-Way invoice where the main supply is the supply of services, the GST Board amended Rule 138 of the CGST Rules, 2017, which, among other things, stated : “Information to be provided before the start of the movement of goods and the generation of the electronic consignment note. (1) Any registered person who causes the movement of goods with a consignment value exceeding fifty thousand rupees…. Thus, the e-Way invoice must be generated for the movement of goods” stipulates that from October 1, 2021, “when the main supply is purely a supply of service and does not involve any movement of goods, the e-invoice Way is not necessary to generate. »

However, in cases where, alongside the main provision of the service, the movement of certain goods is also involved, e-Way invoices may be generated. Such situations may arise when providing services such as printing services, contract works services, catering services, pandal or shamiana services, etc. In such cases, e-Way invoices can be generated by entering the details of the HSN code of the goods, as well as the SAC (Service Accounting Code) of the services concerned.

This GSTN issue on e-way invoice generation has been an issue since March 17, 2021, when a change in the e-way invoice generation system was made, in which no e-way invoice could be generated only for the SAC code and it was necessary to mention at least one HSN code to validate and generate the electronic invoice.

“Companies in the printing industry who undertake orders for the supply of their goods under the SAC code were an affected lot – wondering what process to take to generate the e-way invoice as they could not mention the HSN code in the E-way Invoice (because the products must be supplied under the SAC as per the Council’s clarifications) They also cannot take the risk of supplying what is essentially the “goods” without generate the consignment note. The same has caused a lot of confusion in the industry and there was no clarity on the process to be taken to resolve this issue,” said Iqbal Kherodawala, President of BMPA.

A solution had to be found, and it could only go through appropriate procedural changes that could be issued by the Central Excise and Customs Tax Commission (CBITC) and the GSTN. Kherodawala said, “Members of the BMPA Steering Committee were completely gripped by this issue. Print buyers have also been fully invested in this new complex.

Kherodawala set up a sub-committee consisting of Faheem Agboatwala, Mehul Desai and Saubhagyanidhi Seksaria to highlight the concerns and challenges facing the industry at CBITC. In addition, the BMPA has also sought expert advice and support from Senior Counsel Shailesh Sheth of SPS Legal to represent the case at CBITC.

The new advice on ISF generation is the result of the BMPA’s intervention in the matter, said Seksaria, a member of the subcommittee, the association set up to tackle the issue. “With more coordination and communication and in an interlude of less than six months, the result is relieving with an appropriate directive now at hand,” Seksaria concluded.

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