Work books or Practice books printed and sold are exempt from GST [High Court]

In the case of Sonka Publication India Pvt. Ltd. v. Union Of India and Ors. WP (C) 10022/2018, setting aside ruling of AAR, Honble Delhi HC held that the books published and sold by the are classifiable under HSN 49.01 (Printed Books- Exempt) and not HSN 48.02 (Exercise Books- Chargeable to GST at 6%).

Question before the Honble Court was, whether the books in question are classifiable as Printed Books’ falling under HSN 4901 [exempted] or as children’s Drawing Books’ under HSN 4903 [exempted] or as Exercise Books’ under HSN 4820 [chargeable to 6% tax]

Honble Court relied on the Honble Supreme Court ruling in the case of C.C. (General), New Delhi v. Gujarat Perstorp Electronics Ltd wherein it was observed that one must refer not only to the physical, but also functional characteristic of “book”.

The high court observed that, “the emphasis was on a ‘functional characteristics’ of a book. In this case, a question to be asked is whether the books in question merely help the child in improving the child’s handwriting by providing space in a book by copying from a written text or does it pose questions to the child to answer and whether the teacher then can evaluate, on the basis of such answers, the child’s ability and understanding In the present case, the ‘work books’ or ‘practice books’ printed and sold by the Petitioner certainly fall in the latter category i.e. they test the child’s knowledge, ask questions which the child has to answer, and facilitate evaluating the child’s understanding.

Further, at the end of the course, by using these books, the attempt is to enhance the educational value addition as far as the child is concerned. The attempt is to help the child think on his own and to enable the teacher to evaluate the child’s output. By no means can it be said that these books are for enabling a child to merely copy words from a printed text in order to improve his or her own handwriting.

Binding AAR was challenged and set aside by the Honble High Court.