TMI Blog2019 (11) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence is as under: 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) 2. The facts having been narrated in detail in the order, I do not find it necessary to reiterate the same. The Member (Judicial) has taken a view that prior to 01.07.2012, the services rendered by the assessee is not taxable under Business Support Services whereas Member (Technical) has taken the view that the activities carried out by the assessee would fall within the definition of Business Support Services . Before going into the duty of resolving the difference between the two Members, it requires to be mentioned that both Members agree that the activity/services rendered by the assessee post 01.07.2012 does not attract levy of service tax since education is covered by the mega notification No 25/2012-ST dated 20.06.2012. Thus there is consensus that the very same services rendered by the assessee to the service recipient post 01.07.2012 is not taxable. Though Member (Judicial) took the same view for the period prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list the kind of services which are intended to be included under the head of business support . 4. The activities rendered to the educational trusts by the assessee are not in relation to business or commerce of the trust, since these trusts are not running a business perse. These are educational trusts and are registered for providing education and are also availing the status of charitable trust under the provisions of income tax law. The trust deed would show that these educational trusts are public charitable trusts with the objective to shape, aid and maintain educational institutions for primary pre-primary, secondary, intermediate and degree students. It is expressly declared in trust deed that no part of income or the corpus of the trust fund shall be liable for any objective or purposes other than those of the trust set out. Thus the fund of the trust has to be utilised for the objective of the trust only and under no circumstances the fund can be alienated. These Trusts which are recipients of service from the assessee fulfill the conditions of charitable trusts under Section 11 of the Income Tax Act 1961. Therefore, services rendered by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required in relation to administration, management and operations of the educational institutions, including but not limited to 1. Administration of admissions, including handling the admission process of the students 2. Collection of fee on behalf of the trust and issuance of receipts in respect thereof 3. Provision and maintenance of hostel facilities in respect of each of the Educational Institution having hostel; 4. Provision and maintenance of Mess Facilities 5. Recruitment and /or employment of teaching and nonteaching staff and administering their employment related matters including teacher training; 6. Provision of content, curriculum and related services with regard to delivery of education services to the students etc. Based on the above agreement VEMPL has rendered following services to SKCMET: 1. Accounting services 2. Administrative services 3. Fleet management services 4. Pay roll services 5. Teaching assistance services etc. Based on the above agreement, VEMPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire educational services imparted by these trusts to the institutions are by a family and its members in guise of trust and educational institutions. They collected huge fees from the students and also marketed their operations through advertisement in the media and door to door canvassing etc. The activity of SCET or that of SKCMET cannot be considered as charitable in nature. He adverted to the revenue earned and profit made by them. These educational institutions engaged in providing education for students are collecting huge fees and are therefore doing business. It is also submitted by the learned Senior Counsel that in the earlier proceedings the issue of exigibility to service tax under Commercial Coaching and Training Services for the educational institutions was held to be valid. However, the demand was set aside on the extended period. The appellant therein/SCET has accepted the decision but the appeal filed by the department against the said order on the issue of limitation is still pending. Therefore it has to be held that services rendered by the educational institutions are in the nature of commercial coaching and training services . The entire operations of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of imparting education. These trusts carry out their objects by running schools and junior colleges. These trusts are registered as Charitable Trusts and also enjoy status of charitable trust engaged in education services under section 11 of Income Tax Act, 1961. Further, the students passing out from schools / colleges run by these trusts are issued certificates by Andhra Pradesh Board, which are courses recognized by law. 15. 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. The clarification issued by Board vide Circular No. 80/10/2004-ST dated 17.9.2004 clarifying the construction services falling under CICS and WCS reads as under:- 13.2 The leviability of service tax would depend primarily upon whether the building or civil structu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redibility in the field of education through these Board / University. 19. 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. The unaided institutions more often than not provide additional facilities and comforts for students and staff which are not done so by Government run institutions. Provision of such additional comforts will obviously entail additional costs which is surely not reimbursed or subsidized by the Government. If the ultimate service delivered is granting of a certificate or degree recognized by law, they would still enjoy the exemption available to educational institutions. Notification 14/2004 or the Mega notification 25/2012 does not refer to quantum of fees collected for availing the exemption. Legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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