We, the books publishing company in tamilnadu, having books by giving royalty to the authors and sale the same to books shop by wholesale and retail. Now, we enter in to an agreement with book shop in another state, in which in agreement is like, we had sent the contents of the books in PDF files to that book shop and they print the content of the books we had given to them whenever sale occurred at their end. For that, they raise a printing invoice on us and file in GSTR1 and the sale amount of books made at their end were remitted to us after deducting printing cost and certain specified margin kept in their hand.
Now my query is Is the above transaction was come under sale of goods or sale of services for us? If come under sale of services, then who is considered as service provider and what type of services? Another query is Is RCM applicable under GST for royalty amount given to authors? Is RCM applicable under GST, for the tamil translation rights for foreign language books? Note, we had paid amount in foreign currency for the tamil translation rights.
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Sale of Goods or Services?
Replies (2)
Quick Summary
Your arrangement is a Sale of Goods (Exempt Books) since you pay for the printing services outsourced to the book shop. RCM applies at 12% on author royalties unless the author explicitly opts for Forward Charge. RCM also applies to foreign translation rights as it is classified as an Import of Service taxable under reverse charge.
Sending PDF content for printing is a SERVICE under GST since you are licensing intellectual property, not transferring a physical good. The classification as goods applies only when tangible items change hands.
On your specific questions:
1. GOODS OR SERVICES: Service. SAC 9989 covers other services related to publishing and content, or SAC 9973 for IPR-based licensing arrangements. GST rate is typically 12% or 18% depending on the exact nature.
2. WHO PROVIDES THE SERVICE: The publisher is the service provider and the printing shops are recipients.
3. RCM ON AUTHOR ROYALTIES: Yes. Entry 5 of Notification 13/2017-CT(R) explicitly brings transfer of copyright by an author in original literary works to a publisher in India under Reverse Charge. You (the publisher) pay GST at 12% under RCM. The author does not charge GST.
4. FOREIGN TRANSLATION RIGHTS (FOREIGN CURRENCY): Also RCM. Under Section 5(3) of the IGST Act, import of services by a registered business is taxable in the hands of the Indian recipient under reverse charge. Pay IGST on the import value.
Note on the shop arrangement: If shops handle printing and remit you revenue minus their costs, you may be acting as principal and shops as job workers. Clarify the contract as this affects place of supply and invoice structure.
For GST return filing requirements covering all these supply types, see: taxgarden.in/blog/types-of-gst-returns-india-2026
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