GST on Printing Ink and Machine Parts Sold for Single Per-Click Fee
Supplying printing ink and replaceable printer parts together for a single per-print rate is a mixed supply under GST.
- Ruling
- GST-ARA-38/2017-18/B- 45 Mumbai, dated 08.06.2018
- Dated
- 08 Jun 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- HP asked how to tax printing ink and spare parts billed per print.
- Ink and parts charged together count as a mixed supply under GST.
- Items replaced at different times are not naturally bundled composite supplies.
- Monthly per-print billing arrangements qualify as a continuous supply of goods.
- Invoices for monthly consumption must be issued within 15 days of month-end.
In short
HP India supplied ElectroInk along with printer parts like developers, blankets, and imaging plates to printing businesses. Instead of charging for each item separately, HP billed customers a single monthly price based on how many pages were printed. The company asked the Maharashtra Authority for Advance Ruling whether this arrangement was a composite supply or a mixed supply under GST, and when monthly per-click invoices should be issued.
What has changed
How it worked before
Businesses offering usage-based billing models often assumed that supplying ink with machine maintenance parts was a composite supply, taxing the whole contract at the rate of the primary item like ink.
What has changed
The authority ruled that combining ink and machine parts for a single per-print fee is a mixed supply under Section 2(74) of the GST Act because the parts have different lifespans and are replaced independently. This means GST applies at the highest tax rate among all items included in the deal. The authority also determined that this is a continuous supply of goods under Section 2(32), requiring invoices under Section 31(4) to be issued by the 15th day of the following month.
Who this affects
Printer manufacturers, office equipment distributors, and leasing companies selling machines or consumables under pay-per-print or usage-based billing contracts.
An example
Apex Printing Solutions enters a pay-per-impression contract with an equipment vendor for a digital press. The vendor provides ink, imaging plates, and press blankets together, billing Apex ten rupees for every impression printed. Because the blankets and imaging plates wear out at different times and are replaced separately, the bundle is a mixed supply. The vendor must bill GST at the highest rate among the ink and individual machine parts, issuing monthly statements by the 15th of the next month.
What you should do
Review your bundled per-print contracts to see if independent spare parts and consumables are priced together under one rate. Remember that this advance ruling GST-ARA-38/2017-18/B-45 Mumbai binds only HP India and its local tax officers. If you run a similar billing model, consult a tax professional or apply for your own advance ruling before changing your GST calculation.
If you do nothing
If you treat bundled spare parts and ink as a composite supply without a ruling, tax officers may reclassify your invoices as a mixed supply. They can demand tax at the highest GST rate of any item in the contract for all past sales. This can lead to unexpected back taxes, interest charges, and penalties.
The terms explained
- Mixed supply
- A combination of two or more individual items sold together for a single price when they are not naturally bundled. The entire package is taxed at the highest GST rate among the items.
- Composite supply
- A package of goods or services naturally sold together in the ordinary course of business where one main item leads the bundle. The whole package is taxed at the rate of that main item.
- Continuous supply of goods
- A regular, ongoing supply of products provided under a contract requiring periodic billing or account statements.
The ruling in detail
Authority for Advance Ruling
HP India Sales Private Limited
GST-ARA-38/2017-18/B- 45 Mumbai, dated 08.06.2018 · Maharashtra
Questions before the authority
- Classification of Electro Ink supplied along with consumables under GST;
- Determination of time and value of supply of ElectroInk with consumables under the indigo press contract.
Facts
The applicant imports ElectroInk and printer consumables such as binary ink developer, blanket, and photo imaging plates for HP Indigo printing presses. It supplies these products to resellers on a back-to-back contract model billed on a per-click/impression basis monthly. The supplies remain the property of the applicant until utilized in the press by end customers.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of Electro Ink supplied along with consumables | Mixed supply under section 2(74) and continuous supply of goods under section 2(32) Items are not naturally bundled as each consumable has an independent lifespan and can be supplied separately |
| Time and value of supply under Indigo Press contract | Time of supply is earliest of invoice date or payment receipt date; Value of supply is transaction value in the invoice issued u/s 31(4) Invoices must be issued on or before 15 days from the end of each calendar month |
The Authority held that the supply of ElectroInk with consumables is a **mixed supply** under Section 2(74) of the GST Act and constitutes a **continuous supply of goods** under Section 2(32). The time of supply is the earliest of the date of invoice or date of payment receipt, with invoices required to be issued on or before the 15th day following the calendar month of supply. The value of supply shall be the transaction value as reflected in the invoice issued under Section 31(4).
Reasoning
The Authority found that the printer consumables have distinct lifespans and replacement frequencies, meaning they are not naturally bundled or mandatorily supplied in conjunction, ruling out a composite supply under Section 2(30). Because multiple distinct goods are supplied together for a single per-click price, the transaction qualifies as a **mixed supply** under Section 2(74). Additionally, because goods are supplied recurrently under a contractual arrangement requiring successive statements of account, the contract constitutes a **continuous supply of goods** governed by Section 31(4) and Section 12.
Provisions relied on
- Section 2(30) of the CGST/MGST Act, 2017
- Section 2(32) of the CGST/MGST Act, 2017
- Section 2(74) of the CGST/MGST Act, 2017
- Section 12 of the CGST/MGST Act, 2017
- Section 15 of the CGST/MGST Act, 2017
- Section 31(1) of the CGST/MGST Act, 2017
- Section 31(4) of the CGST/MGST Act, 2017
For the practitioner
This ruling establishes that per-click consolidated billing models for machine consumables are treated as **mixed supplies** when individual consumables can be replaced independently. It also affirms that periodic billing arrangements for equipment supplies constitute a **continuous supply of goods**, fixing the invoice deadline to 15 days from the month's end.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/mah_aar_38_2017-18_b-45_08.06.2018_hpispl.pdf
Legibility of the scan, as read: high.
Prepared 19-10-2026.
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