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2016 (5) TMI 515

Head Note / Extract:
Scope of negative list u/s 66D(1) - educational services - Revenue Sharing agreement - Partnering Agreement to combine their mutual areas of expertise for the setting up and operation of an educational institution - the entire revenue relating to the school will be received in a joint account operated by the applicant and Choice Foundation jointly and revenue share would be drawn from this account by the applicant and Choice Foundation.

Held that:- with regard to pre-school education and education up-to higher secondary school or equivalent, the “partnering person” would come under the Negative List and would not be liable to Service Tax.

Regarding construction service where the entire consideration is received after issuance of completion certificate - Held that:- the construction of complex etc., in this case will not come under the ambit of declared service and not be liable to Service Tax. Renting of Immovable Property.

Regarding renting of premises - Held that:- the applicant, Choice Foundation and “partnering person”, are all 3 separate persons under Section 65 B (37) of the Finance Act, 1994. Therefore, service of providing of renting of immoveable property by applicant to “partnering person” will not be “self service”. The consideration for renting said property would be received as per the “Revenue Share” clause in the said Agreement. Therefore, renting of immoveable property would be liable to Service Tax.

a) Service Tax is applicable on the revenue share relating to the applicant to the extent it is relatable to rendering of taxable service. - b) Service Tax is applicable on the revenue share relating to Choice Foundation to the extent it is relatable to rendering of taxable service. - c) Service Tax is not leviable on the fees collected from the students to the extent it is covered under the Negative List in terms of Section 66D (l) of the Finance Act, 1994. - d ) Service Tax is payable by a person providing taxable service in terms of Section 68(1) of the Finance Act, 1994. Therefore, in this case, Service Tax will not be payable by the students, as they are not providing any service.

 


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