CESTAT Ruling: Printing Charges Taxable – S.No. 30 Exemption Under Notification 25/2012‑ST Not Applicable

 

🖨️ Introduction

Many businesses believed that Notification 25/2012‑ST provided relief from service tax on printing costs under S.No. 30. However, a recent CESTAT Delhi ruling (June 13, 2025) clarifies that this exemption does not cover printing services provided by intermediaries, meaning tax is still payable. This article breaks down the key legal issues, implications for taxpayers, and practical guidance.

1. Notification 25/2012‑ST – What Did It Promise?

Notification 25/2012‑ST, issued June 20, 2012, exempts services in two categories (S.No. 30):

1. Any process leading to manufacture or production of goods (excluding liquor);

2. Intermediate production processes as job work in agriculture, printing or textile processing 

Key terms:

• Manufacture implies conversion to create a new good.

• Job work means subcontracted processes where the job worker processes goods on behalf of the principal, returning the processed items to them.

2. The Dispute: Printing & Service Tax

Fact pattern (Chhattisgarh Samvad case):

• A government PR firm created designs in-house and outsourced printing to empanelled agencies.

• It invoiced the government department for the printing costs, service charges, and service tax.

• The firm paid service tax on its commission, but did not pay service tax on printing charge on the assumption that it was exempt under S.No. 30 taxtmi.comtaxguru.in+1taxscan.in+1taxscan.in.

CESTAT’s verdict: The exemption in S.No. 30 is confined to “intermediate production process as job work.” Since the PR firm was not acting as a job worker (it was merely outsourcing printing), the exemption does not apply. Service tax is therefore payable on the printing charges collected, albeit subject to limitation periods .

3. What the Ruling Means

Scenario	Exempt under S.No. 30?	Service Tax Payable?
Printer subcontracted by PR agency	❌	✅ on printing charge
Direct job worker contracted by manufacturer	✅	❌, if genuine job work
Content creator outsourcing printing	Not job work – ❌	✅ on printing charge

🔍 Insight: Only true job work companies—taking goods from manufacturers, processing, and returning them—qualify for the exemption. Firms subcontracting printing, despite labeling it “job work,” do not qualify.

4. Impact on Taxpayers

Taxpayers involved in similar setups should note:

• PR firms, marketing agencies, and design houses that outsource printing must pay service tax on printing charges.

• Claims for exemption should be strictly supported by genuine job work processes.

• If you were audited and didn’t deposit tax on such charges, you may face demand plus interest, normally limited to the standard 5‑year window.

5. Best Practices & Tips

1. Self-assess your role: If you're a design/content provider outsourcing printing, you're liable.

2. Reassess historic invoices: If you erroneously claimed exemption, re-evaluate exposure within the limitation period.

3. Maintain clarity in contracts: Clearly define if you're a job worker.

4. Stick to documentary evidence: For true job workers, demonstrate receipt and return of goods, job work registers, and returns filed.

5. Monitor limitation window: Traditional 5-year limit applies unless findings suggest otherwise.

6. Real-World Example

A government agency pays ₹1 crore inclusive of printing charges and your service fee.

• Printing agency: ₹80 lakh + service tax

• Your commission: ₹20 lakh + service tax

If you pass-through print amounts without tax deposit and claim exemption, you're incorrectly avoiding tax. Only legitimate job work provisions entitle exemption.

7. Conclusion

Despite appearances, exemption under S.No. 30 of Notification 25/2012‑ST does not apply to agencies outsourcing printing. The CESTAT Delhi ruling (June 13, 2025) confirmed service tax must be paid on printing charges, clarifying the legal position and reinforcing compliance responsibilities.

✅ FAQs

Q1: Does S.No. 30 exempt all printing services?
A: No. It only exempts genuine job work in which processing goods (supplied by a principal) are returned. Outsourcing for content agencies doesn’t qualify.

Q2: What is ‘job work’?
A: A process where a job worker receives goods from a principal, processes them, and returns them. The printer must not act as the primary service provider.

Q3: How long can the tax department raise demands?
A: Generally up to 5 years under normal limitation. Extended periods require fraud or evasion.

Q4: How can I avoid future disputes?
A: Clearly document your role, maintain job work records, and treat outsourced printing as taxable unless proven as genuine job work.

Q5: Are penalties waived if I correct past mistakes?
A: Possibly. If voluntarily disclosed and paid within the limitation period, penalties and interest may still apply, but up to discretion.

🔑 Keywords

• Service Tax on Printing Charges

• Notification 25/2012‑ST S.No. 30 Exemption

• Printing Job Work Service Tax

• CESTAT Delhi Ruling June 2025

• Exemption Not Applicable