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Service Tax Applicability - Service Tax

#1 Issue Id: - 5268
Dated: 2-2-2013
By:- Dipak Rajpara
Service Tax Applicability

  • Forum

Respected All,

I wish to know Service Tax Liability (Applicability of S Tax) in below

  • The Individual has agreements with several universities which offers postal courses.
  • The Individual himself serches the students who wish to undergo such courses.
  • He collects the fees from the students as his own charges and pays fees to above universities keeping his hidden margin with him.
  • He also supports in conducting Open Book Exams in his city.
  • Finally the Student gets Certificate by the University directly

Whether this type of business/profession is covered under Service Tax.?

Is there any Exemption or Abatement available to such Services?

Thanking You all,

Best Regards,


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#2 Dated: 2-2-2013
By:- Pradeep Khatri

Dear Sir,

Hope that appended judgment may be helpful to you.


Pradeep Khatri

2013 (1) TMI 686 - CESTAT, NEW DELHI

Soni Classes Versus Commissioner of Central Excise. Jaipur-I

Valuation – Short payment of Service tax – Penalty u/s 76, 77 & 78 - Misstatement - Suppression of facts - Intent to evade payment of duty - Commercial training or coaching centre – Exclusion of the value of materials sold from the value of the taxable services - notification 12/2003-ST dated 20.6.2003 - Circular No. 59/8/2003-ST dated 20.6.2003 – Two types of bills were being issued one for training and coaching classes run by assessee and the other as a consideration for providing study material to the students by another firm which is run by assessee’s wife in same premises – Entire receipts are being divided into two parts

Whether M/s Soni Patrachar was independently selling the books to their students or whether the same was created on paper and the total consideration received for providing coaching services by M/s Soni Classes was being artificially bifurcated, so as to avoid payment of service tax

Held that:- The bills was not able to produce any literature issued to the public or the invoices issued for enrolling the candidates. There is no material on record to show that M/s Soni Patrachar was an independent proprietary firm. On the other hand, a lot of evidence appears on record to reflect upon one fact that though the value of coaching classes being provided by M/s Soni Classes to their students was collected as such, the same was being projected under two different categories.

Providing study materials, test papers etc. is a part of coaching services and is required to be included in the value. At the cost of repetition it may be observed that it is only the extra text books or extra material, which is admittedly being sold to the students and is also available for sale to outsiders and students or procured from the outside and sold to the candidates, which will not form part of the taxable coaching services

The appellant was aware of the fact that it is the entire consideration for the coaching services which has to be taxed. It was only with a mala fide view to save the service tax that he bifurcated the consideration into two different parts and indulged in diverting a part of the consideration to the sale of the study material – In favour of revenue.

#3 Dated: 2-2-2013
By:- Dipak Rajpara

Respected Sir,


Thank You very much for your valuable feeback.

The Individual here is not running a coaching institute, he is charging fees on payment of which the student gets enrolled to a university directly. And up on completion of Postal Test. the university would issue the certificate. In this case under which category of service he would be covered?

Thanks in Advance..

Kind Regards,


#4 Dated: 2-2-2013
By:- Pradeep Khatri

may be under coaching services it would be payable.

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