GST on the subscription of Weekly Magazines- Advance Ruling - M/S LAW WEEKLY MAGAZINE

May 18, 20203 min read

ADVANCE RULING NO : TN_AAR_13_2020 DATED 27-02-2020

Author’s Message

Before filing an application to Authority of Advance Ruling, one shall keep in mind that an applicant can obtain advance ruling only on the issues listed in section 97 of CGST act, 2017.

In this Advance ruling, the applicant raised 4 issues out of which 3 were on the issues that were not covered in section 97, hence no advance ruling was given on those 3 questions.

Further, this advance ruling talks about the applicability of GST on software sold through DVD or pen drive or GST on sale of Database.

Facts of the Case

The applicant is a proprietor of M/S Law weekly journal which publishes law journals in print and publishes and sells the same content that is in books in an electronic form in DVD/CD with software to search and read it in computers. Once the software is installed, it can be used to access the searchable database which is valid for year subscription and updates are provided weekly, when the user connects to the internet. The renewal is charged separately after one year without needing any more supply of DVD/CD.

According to the applicant their books and magazines are available on electronic format to the customers through the use of their proprietary software, hence they are e book and eligible for notification 13/2018 which states that Supply of E-books shall attract GST @ 5%.

Question Raised

1. Whether the assessee which publishes law journals in print and sells the same content that is in books in an electronic form in DVD/CD with a software to search and read it in computers and hand held devices come under the category of “E-Books”, so that it can avail the benefit of notification dated 26.07.2018in respect of E-Books?

2. Whether the liability on sale of DVD/pen drive which contains printed version of law citations can be adjusted against the available ITC?

3. Whether the liability on sale of e-books of printed version of law citation can be adjusted against the available ITC?

4. Whether the balance ITC after adjustment accrued on the purchase of paper and other materials can be reversed while filling GSTR-9?

Findings and Rulings

Questions 2,3 and 4 are not covered under section 97 of the CGST Act, 2017 and hence no advance ruling was given on these issues.

Further, as per Authority of Advance Ruling Authority, the DVD/CD sold by the applicant is not an electronic version of print journals as the files are not in the format of .doc, .txt, .pdf or any other readable files but are in the executable file (setup application). The applicant supplies DVD/CD with a dongle which is a composite supply of Goods 1) DVD/CD with dongle 2) “The law weekly desktop” software application and a 3) supply of service to use the software for a specific period of time in which principal supply is supply of goods i.e DVD/CD containing software.

Further AAR mentioned CTH8523 of custom tariff which states that initial supply of DVD/CD is supply of goods and a per explanation under notification 13/2018 “E-Books are electronic version of printed books falling under the tariff item 4901 and supplied online which can be read on a computer or a hand held device while in the given case supply of DVD/CD is a supply of software which is used to access content containing the judgments of various fora, case laws acts etc.

Hence the applicant cannot avail the benefit of notification 13/2018 as it does not fall under the definition of E-Books.