Tax applicable??

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2011 In case Person is engaged in Printing of Identity Cards & Other Printing Material, He is required to pay VAT or Service Tax????
Further How to arrive @ Taxable Value????

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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22 October 2011 Mr Author,
Sale of printed material is chargeable with VAT(in karanataka 5%).Check up in your state.For making products as per customers' requirement, you can treat it as a works contract and pay 5% vat on the total value minus the labour charges.
MJK

Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2011 What about Service TAx???

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Great question!

Here’s how tax applies for **printing of identity cards and other printing material**:

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### 1. **VAT or Service Tax?**

* **Sale of printed material (tangible goods)** — generally subject to **VAT** (or now GST) as a sale of goods.
* **Service Tax (now GST services part)** applies if the activity is considered a **service** (e.g., pure printing service without transfer of goods, or if it’s a works contract).

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### 2. **When is VAT applicable?**

* If you **sell printed identity cards or printed material as goods**, VAT applies on the sale price.
* VAT rate varies by state; e.g., Karnataka VAT was 5% (pre-GST).
* If you are providing **works contract** (i.e., printing *plus* fabrication/installation or customization), VAT may apply on the *value of goods portion* while service tax (pre-GST) applied on service portion.

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### 3. **When is Service Tax applicable?**

* **Before GST**, printing services attracting Service Tax if it qualifies as a service.
* Pure printing service without transfer of goods generally attracted Service Tax under **‘Printing Services’**.
* If your printing involves only service without delivery of goods (e.g., printing on client’s supplied material), service tax is applicable.
* For works contracts involving printing, service tax was payable on the service portion, VAT on goods.

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### 4. **How to arrive at Taxable Value?**

* **For VAT:**

* Taxable value = **Sale price of goods minus labour charges** (if treated as works contract).
* Labour charges can be deducted if separately identifiable.

* **For Service Tax:**

* Taxable value = **Gross amount charged for service** (usually the entire invoice amount if no goods transfer).

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### 5. **Summary**

| Scenario | Tax Applicable | Taxable Value |
| ------------------------------------ | -------------------------------- | ------------------------------------------------------ |
| Sale of printed cards as goods | VAT/GST | Sale price minus labour (if works contract) |
| Pure printing service (no goods) | Service Tax/GST | Full service charge |
| Works contract (printing + services) | Both VAT + Service Tax (pre-GST) | Goods portion for VAT, service portion for Service Tax |

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Since GST is in place now, these are merged, but for historical clarity, this was the situation.

If you want, I can help you calculate taxable value or GST rates for your state!

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