The Madhya Pradesh GST Authority for Advance Rulings (AAR) has ruled that children’s unbound picture books will attract a GST rate of 5%. Over the past two years, given the COVID-19 pandemic, home learning has become a popular option for kids, especially preschoolers. Parents take on various monthly and annual subscriptions where children are taught via a mix of learning from books, activities, and online videos to develop their linguistic, logical, cognitive, sensory, and creative skills.
One such online subscription for preschoolers, called the Class Monitor Home Learning Kit, provided educational activities through cards, pamphlets, and sheets that contained pictures. The kit was manufactured and marketed by a company called Riseom Solutions.
Children’s picture books fall under the tariff heading 4903 and attract a nil rate of GST. But, in this case, the AAR found that the learning kit comprises items that fall under the tariff heading 4901, which covers booklets, pamphlets, leaflets, brochures, and similar printed matter. Hence, the learning kit will be subjected to a GST rate of 5%.
The company had explained that the kit’s contents were similar to a children’s picture book and contained pictures like fruits, vegetables, animals, etc., for early learning. The picture sheets were not bound together as that would it too heavy for a kid to use easily.
The manufacturer also added that an activity-based methodology is used with the instructions printed on the back of the sheets. Various other supporting materials are also provided, such as craft paper, ribbons, a Fevicol tube, etc., to keep a child engrossed in the learning process. However, due to the fact that the sheets were unbound, the AAR decided that the same would not be eligible for a nil GST rate.
GST rulings do not set a judicial precedent, but they could have a persuasive impact on other similar assessments.
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