Since 17 March 2021, there had been a change in the system for generating of e-way bill wherein no e-way bill could be generated only for Service Accounting Code (SAC Code), and one had to mention at least one Harmonized System of Nomenclature (HSN Code) for validating and generating the e-way bill.
Businesses in the printing industry who undertake orders to supply their goods under the SAC code were severely affected. They wondered about the process to be adopted for generating the e-way bill as they could not mention the HSN Code in the e-way bill (as the products are to be supplied under the SAC as per the board’s clarifications). Nor could they risk supplying what essentially is the ‘goods’ without generating the e-way bill. The same caused a lot of confusion in the industry, and there was no clarity on the process to be adopted to tide over this problem.
A solution for this problem could only come via suitable amendments in a procedure that the Central Board could issue for Indirect Taxes and Customs (CBITC) and the GSTN. Members of the BMPS managing committee were entirely seized of this matter. Print buyers were also invested in this issue.
Iqbal Kherodawala, president, BMPA, put together a sub-committee including Faheem Agboatwala, Mehul Desai, and Saubhagyanidhi Seksaria to highlight concerns and challenges faced by the industry to the CBITC. BMPA also sought expert advice and support from senior advocate Shailesh Sheth of SPS Legal to represent the matter with CBITC.
With further coordination and communication and within an interlude of fewer than six months, the outcome is relieving with a suitable directive now at hand, according to BMPA.
Issues on generating e-way bills
On 16 September, the GST Council formally issued an advisory for taxpayers regarding generating e-way bills where the principal supply is the supply of services.
- Representations have been received from various trade bodies stating that they are not able to generate e-way bill for movement of those goods where their principal supply is classifiable as a service since there is no provision for generating e-way bill by entering SAC (Service Accounting Code-Chapter 99) alone on the e- way bill portal.
- To overcome this issue, the taxpayers are advised as below:
- Rule 138 of CGST Rules, 2017, inter alia, states, “Information to be furnished prior to commencement of movement of goods and generation of e-way bill. (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees….” Thus, e-way bills are required to be generated for the movement of goods.
- Therefore, if the principal supply is purely a supply of service and involves no movement of goods, the e-way bill is not required to be generated.
- However, in cases where, along with the principal supply of service, movement of some goods is also involved, an e-way bill may be generated. Such situations may arise in cases of supply of services like printing services, works contract services, catering services, pandal or shamiana services, etc. In such cases, e-way bills may be generated by entering the details of the HSN code of the goods, along with the SAC (Service Accounting Code) of the services involved.
In the coming days, BMPA will arrange to issue a circular to its members in collaboration with SPS Legal that would make for a more precise method of generating EWB guided by the latest advisory of 16 September from GSTN.
Background on SAC code for a supply of printed goods
As per Circular No. 11/11/2017-GST dated 20 October 20, it was seen that in the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute a supply of service falling under heading 9989 of the scheme of classification of services due to the above most of the goods produced by commercial printer were classified as the supply of services and had to be cleared under the SAC code.