Printing Digital Images/Letters On Paper Constitutes Services, Attracts 18% GST Not 12%: Kerala High Court

The Kerala High Court has held that printing digital images/letters on paper constitutes services, and attracts 18% GST not 12%.

The question before the bench was to determine whether the assessee's printing activities ie. converting the figures, letters, photographs etc., in a digital form, into physical format by printing it on paper were liable to GST at 12% or 18%.

Justice Ziyad Rahman A.A. examines both HSN Code 4911 and SCN 998386 and noted that HSN Code 4911 mainly refers to the supply of goods in the form of printed materials, whereas, the SCN 998386 refers to the photographic and videographic processing services, where the printing of images from film or digital media is specifically included therein.

In this case, the petitioners' firm is a partnership firm running an offset printing press engaged in the printing and sales of brochures, books, magazines, posters, leaflets, photo books, notice etc.

The assessee pointed out that, one of the main activities of the assessee being printing photographs through offset printing on the paper, it is deviating from the conventional method of printing photographs on the paper, specifically manufactured for the said purpose and affixing the same on the album, and hence, their supply has to be treated as one of supply of goods.

According to the assessee, the end products are the books, newspapers, magazines, brochures, notices, pictures, menu card, wedding card, posters, visiting card, photos etc. which are supplied by them based on the content furnished by the consumer. According to them, the same would fall under HSN Code 4911 which is taxable at 12%.

However, the tax authorities the activity of the assessee would come within the Code SAC 998386 which deals with photographic and videographic processing services and attracts tax at the rate of 18%.

The bench noted that one of the main activities of the petitioners is to print the photographs which are supplied to the petitioners by their respective customers in a digital form using the medium of CD, Pen drive or HDD etc. The said photographs will be printed by the petitioners using the paper and ink supplied by the petitioners, and through the printing machines owned by such petitioners. After such printing, the final product would be handed over to the customers of the petitioners. Going by the nature of the activity, it can be seen that, the same includes supply of goods as well as supply of services.

The bench further observed that the supply of goods is in respect of the ink and paper used for such printing, whereas, supply of services is in respect of the activity of printing of those matters which are supplied to them by the customers in digital format. Since both the said elements viz; transfer of goods and supply of services are involved in the transaction, it is a composite supply, as defined under section 2(30) of the CGST Act.

The bench disagreed with the assessee's contention that there are no negatives and printing is done directly from the digital format, using the computer.

The word “digital media” itself indicates a process where no negatives are necessary and therefore it certainly leads to the conclusion that, SCN 998386 takes in, the service of digital printing, whether it is through offset printing machinery or other machines, observed the bench.

The bench opined that the activities of the assessee would amount to composite supply, where the predominant element would be supply of services. When the nature of supply of service taken into account, it undoubtedly falls within SCN 998386, which is meant for printing photographic and videographic processing services.

In view of the above, the bench dismissed the petition.

Case Title: M/s Stark Photo Book v. The Assistant Commissioner

Case Number: WP(C) NO. 16709 OF 2024

Citation: 2025 LiveLaw (Ker) 640

Counsel for Petitioner/Assessee: R. Sreejith, K. Krishna, Achyuth Menon and Padmanathan K.V.

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