GST leviable on training/coaching services, as it does not come under the definition of ‘educational institution’ to claim GST exemption

[CA Bimal Jain]

The AAR, Kerala in the matter of  IN RE: M/S. TUTOR COMP INFOTECH INDIA PRIVATE LIMITED  - 2022 (10) TMI 865 - AUTHORITY FOR ADVANCE RULING, KERALA  has ruled that training provided by a training service provider neither leads to grant of any qualification recognised by any law nor is part of an approved vocational education course. Held that, training services does not come under the definition of ‘educational institution’ to claim Goods and Services Tax (“GST”) exemption under Sl. No. 66 of the Notification No. 12/2017 Central Tax (Rate) dated June 28, 2017 (“the Services Exemption Notification”).

Facts:

M/s Tutor Comp Info Tech Private Limited (“the Applicant”) is offering education services to individual students, institutions and Government through its own online platform. The students need to register on the Applicant’s website, then an academic coordinator is assigned to each student and thereafter customized study materials are prepared for each student. Further, the invoices are raised with the description "Tuition Fees”.

The Applicant further submitted that currently the main source of revenue for them is from providing services to overseas students, and hence the services of the Applicant constitute export of services. They were remitting Integrated Goods and Services Tax (“IGST”) and claiming refund of the same. The Applicant contended that the services provided by them to individual students is liable to NIL rate GST since it falls under Sl. No.66(a) of the Services Exemption Notification.

Issue:

Whether the training services provided by the Applicant falls under Sl.No.66(a) of the Services Exemption Notification?

Held:

The AAR, Kerala in IN RE: M/S. TUTOR COMP INFOTECH INDIA PRIVATE LIMITED  - 2022 (10) TMI 865 - AUTHORITY FOR ADVANCE RULING, KERALA held as under:

• Noted that, in order to qualify for exemption under Sl. No. 66(a) of the Services Exemption Notification, the Applicant should be an ‘educational institution’ as defined under clause (y) of Para 2 of the Services Exemption notification.
• Opined that, the Applicant is not a formal school, but an institution providing special training / coaching to students who are enrolled in formal schools for education up to higher secondary or equivalent.
• Observed that, the training provided by the Applicant neither leads to grant of any qualification recognised by any law for the time being in force nor is part of an approved vocational education course.
• Stated that, the services provided by the Applicant are appropriately classifiable under Heading 9992 - Group - 99929 - SAC - 999293 as commercial training and coaching services.
• Held that, the Applicant does not fall under the scope of ‘educational institution’ as defined in sub-clause (i) of clause (y) of Para 2 of the Services Exemption Notification. Hence, not exempted under S1. No. 66 of the Services Exemption Notification.

Relevant Provisions:

Sl. No. 66 of the Services Exemption Notification:

“Sl. No.	Chapter, Section, Heading, Group or Service Code (Tariff)	Description of Services	Rate (percent)	Condition
66	Heading 9992 or Heading 9963	Services provided - (a) by an educational institution to its students, faculty and staff; (aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee; (b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution;  Provided that nothing contained in sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of,-  (i) pre-school education and education up to higher secondary school or equivalent; or  (ii) education as a part of an approved vocational education course. (v) supply of online educational journals or periodicals:	Nil	Nil”

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