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2019 (11) TMI 1258 - AT - Service TaxClassification of services - Business Auxiliary Services or not - education services rendered by service recipients - the services rendered are in the nature of business or not? - Whether prior to 01.07.2012 the services rendered by appellants-assessee is taxable under Business Support Services as held by Hon’ble Member (Technical) or not taxable as held by Hon’ble Member (Judicial)? - difference of opinion confines to the period prior to 1.7.2012. HELD THAT:- Notification No. 14/2004-ST provided exemption to organizations providing Business Auxiliary Services in relation to education services. So also in the case of ‘commercial or industrial construction services’ and ‘works contract services’ when the buildings are constructed for use by educational institutions or hospitals, etc., was clarified by Board to be not subject to levy of service tax as these buildings were not used for commercial or industrial purposes. It can be seen that prior to 2012, there has been several exemptions in relation to education services. After 2012, the classification of various services has been given away with and there is more clarity as to the services which are intended to be taxed. Even a cursory perusal of the mega notification 25/2012 would show that legislature intends to keep away essential services and public utility services from the burden of tax. There is no dispute that the educational institutions run by these Trusts are recognized by Andhra Pradesh Board. Merely because the schools run by these trusts collect fees from the students and also engage in providing integrated intermediate education, it cannot be said that they are not rendering education services. Moreover, the said integrated intermediate coaching is also recognized and conducted on instructions of the Board - The ‘State’ is duty bound to provide education services to its subjects. Article 21A recognizes education as a fundamental right. As per the said Article, the State shall provide free and compulsory education to children between 6 and 14 years of age. When the State does not have necessary wherewithal to fulfill this obligation, it uses the machinery of private sector to render these services. Thus the fees collected by an institution cannot change the nature of the services rendered by them. In Para 3 to 6, brother Member (Technical) has analyzed the issue of levy of service tax for the period prior to 01.07.2012 and observed that the service recipient are rendering services on an industrial scale and the revenue running into thousands of crores of rupees is not a charity and therefore service recipients are running ‘business’ - I am not able to agree with this view for the reason that profits made or turnover cannot be a yardstick for deciding the classification of services. For a particular activity to be subject to levy of service tax, it has to fall within the four corners of the definition. When admittedly these Trusts are rendering education services and the courses are recognized by Andhra Pradesh Board, it cannot be said that since fees is collected or that fees collected is high, the education services are in the nature of a business. I agree with the view taken by brother Member (Judicial) that prior to 1.7.2012, the services rendered by the assessee is not taxable under Business Support Services. Time Limitation - HELD THAT:- The point of difference referred to me by the Hon’ble President is only as to the taxability of services for the period prior to 1.7.2012 and there are no other points of reference. The third Member can either agree or disagree with the Members and cannot enter into any point which is not referred to by the Hon’ble President - the said argument raised by the ld. counsel for the appellant before me on the ground of limitation being outside the scope of reference, does not require to be addressed.
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