TMI Blog2020 (9) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (y) of Paragraph 2 of the said Notification No. 12/2017-Central Tax (Rate). It is found that schools are providing education to the students up to higher secondary standard and therefore fall under the definition of Educational Institution as defined vide clause (y) of Paragraph 2 of the said Notification. Whether the conditions mandated by entry 66 (b) (iv) of notification 12/2017-Central Tax as reproduced are fulfilled or not as far as the services relating to conduct of examination by, such institution; up to higher secondary? - HELD THAT:- It comes out that schools taking ASSET will use its results for its examination process and overall assessment of the students. The Schools uses ASSET for the purpose of assessment and diagnostic assessment of its students. ASSET uses multiple choice question to focus on measuring how well SKILLS and CONCEPTS have been understood by the students. The basic nature of ASSET service is an examination to be conducted by Education Institution (School) but outsourced to the Educational Initiatives (EI). We also find from the submissions of applicant that ASSET is an educational assessment exam taken at school and it does not envisage a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment of its students. The detailed description is mentioned here in below: ASSET 2.2 ASSET stands for Assessment of Scholastic Skills Through Educational Testing. It is a scientifically designed, skill-based assessment Exam. Rather than testing rote learning, it uses multiple choice question to focus on measuring how well SKILLS and CONCEPTS have been understood by the students. The basis nature of ASSET service is an examination to be conducted by Education Institution (School) but outsourced to the Educational Initiatives (EI). The assessment generates examination reports for students, indicative of their progress and topics that require attention and improvement. ASSET is an educational assessment exam taken at school and it does not envisage any kind of coaching and/or training of teachers or administrators. ASSET exam is conducted without any pre/post teaching business relation with the school. The exam is conducted at school and schools, based on their internal policy, make ASSET a part of their evaluation system. They also give student wise appropriate weightage to ASSET score. 2.3 Salient Features of ASSET are as under: For student of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same school as well nationally. 2.9 The applicant further submitted that the ultimate users/ beneficiaries of the applicant services are the students of primary and secondary schools, educational institutions, state / central for the purpose of framing public policy in connection with education. These solutions are focused on improving the learning levels of the child in the private schools and government school system. 3. Accordingly, the applicant sought the Advance Ruling on the following, Whether the educational assessment examination (ASSET) with its variants) provided by the applicant to school/educational organization is exempted from payment of GST under Sr. No. 66(b)(iv) of the Not. No. 12/2017-CT (rate) dated 28.06.2017 and entry No. 69(b)(iv) of Not. No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 as well as equivalent SGST Notification. Applicant s Interpretation of Law/Taxation under GST Regime 4.1 The applicant has quoted Sections 95 to 106 of the CGST Act, 2017 and stated that the question on advance ruling put forward by him is in respect of determination of whether the liability to pay tax on any goods or services or both, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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; Provided that nothing contained in entry (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. 4.5 Term Educational Institution is defined in point No. 2 of the same Notification, it reads as under: y) educational institution means an institution providing services by way of,- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; (iii) education as a part of an approved vocational education course; 4.6 The applicant submitted that on perusal of the above mentioned Entry No. 66, it is observed that various specified services provided by/ to an educational institution are exempt. Service specified under Entry No. 66 are exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus in view of the above, it is submitted that the service provided by the applicant is in relation to conduct of examination. 6. The applicant has submitted that the term relating to expands the scope of the entry. The terms have been interpreted by the Supreme Court in the case of CCE V/s Rajasthan State Chemical Works 1999(55) ELT 444 (SC) and Union of India V/s Ahmedabad Electricity Co. Ltd. 2003(158) ELT 3(SC), wherein it has been held that such words widen and expand the scope, meaning and content of expressions. Further, applicant submitted that Hon ble Supreme Court in case of M/s. Doypack Systems (P) Ltd. Vs UOI 1988 (36) ELT 201 SC held that, The expression in relation to (so also pertaining to ), is a very broad expression, which pre-supposes another subject matter. These are words of comprehensiveness which might both have a direct significance as well as an indirect significance depending on the context. 7. The applicant has submitted Flyer No. 40 (Education Service) issued by the CBIC provides the clarification that the auxiliary services availed by the educational institutions are exempted. The relevant part of the Flyer is reproduced as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iary services are exempted from GST. Relevant part is extracted and reproduced as under: Regarding, input services, it may be noted that where output services are exempted, the Educational institutions may not be able to avail credit of tax paid on the input side. The four categories of services known as Auxiliary Education services, which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, have been exempted (as per Notification No.12/2017- Central Tax (Rate)). Auxiliary education services other than what is specified above would not be entitled to any exemption. The exemption also comes with a rider. Such services are exempt only for educational institutions providing services by way of education upto higher secondary or equivalent. (from pre-school to HSC). Thus if such auxiliary education services are provided to educational institutions providing degree or higher education, the same would not be exempt. For instance, the services of conducting admission tests for admission to colleges in case of educational institutions are providing qualification recognized by law for the time being in force shall not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 595 999259 Specialised education services 596 Group 99929 Other education and training services and educational support services 597 999291 Cultural education services 598 999292 Sports and recreation education services 599 999293 Commercial training and coaching services 600 999294 Other education and training services nowhere else classified 601 999295 Services involving conduct of examination for admission to educational institutions 602 999299 Other educational support services 7.4 The applicant submitted that the above classification is adopted from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s changes from the traditional chalk and talk method of teaching, provided it is implemented accurately. 7.8 The applicant submitted that ASSET examination being the services relating to the conduct of examination for the educational institution, is passing the tests of exemption notification. Thus in view of the above, it is submitted that the services provided by the applicant to the educations are relating to examination and thus are exempted from GST. 8. The applicant vide their letter dated 22.06.2020 has submitted additional submission wherein it is submitted that following products are offered by them in Normal course of business: A. LARGE SCALE ASSESSMENTS (LSA) B. ASSESSMENT OF SCHOLASTIC SKILLS THROUGH EDUCATIONAL TESTING. (ASSET) C. MINDSPARK D. DETAILED ASSESSMENT A. LARGE SCALE ASSESSMENTS (LSA):- LSA itself suggests its meaning, large scale educational testing/ assessment. Basically it is educational research projects which includes Research activities. Generally such services are provided to an organizations / agencies who wants to evaluate the Students / teachers / educators on a large scale to create knowledge at larger social level; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination results in overall schools assessment system. It will serve no purpose if ASSET was made optional for students because if that be the case the school will not be able to give comparable results for all students of a class. A schools will be able to meet its desired objective of using ASSET only and only if the tool is used equally for all students of the class. Accordingly we categorically submit that the ASSET is mandatory for the entire class and schools cannot choose to make it optional for its students. We would like to seek your attention to the sample application cum agreement form submitted at page 22 of our paper book, please refer point number 11 and 12 of the School Summary Form wherein the school has to categorically mention following 2 details: A. Participation Details Full School (All Classes) OR Full Class /Classes B. Classes Taking ASSET - _____ School has to choose whether they are taking ASSET for full school or for a particular class, here there is no option to select it for some students only. Hence it is clear that that ASSET is given to either a full class or to full school, it cant be bought for individual students. School also has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rate Notification 10/2017. M/S. THE BANGALORE PRINTING AND PUBLISHING CO. LIMITED, Karnataka AAR (2019 (11) TMI 157):- Here it is held that, There may be several services relating to the conduct of examination like invigilation, distribution of question papers, collection of answer sheets, assessment of answer sheets, printing of question papers etc. Therefore, the ambit of the services relating to conduct of examination includes services of printing of question papers also. Therefore, the services supplied by the applicant are covered under the scope of SI. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017. Personal Hearing : 11. Shri Nitesh Jain, Charted Accountant duly authorized representative of the company appeared and re-iterated the submission made in the Application. Discussion and Finding 12. We have considered the submissions made by the Applicant in their application for advance ruling as well as additional submission submitted vide letter dated 22.06.2020. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts the applicant s interpretation of law. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Online question Paper to the students of class 3rd to 10th standard which contains multiple questions. The applicant makes contract with the Schools for supply of ASSET multiple questions of various subjects to their students. The basic nature of ASSET is an examination of multiple questions conducted by School and supplied by the applicant i.e. Educational Initiatives (EI). The applicant has also claimed that under ASSET, they do not provide any pre or post exam teaching to the students. Once the class takes the test under ASSET, they evaluate the answers and provide student wise and class wise results. The exam is conducted at school and based on their internal policy, all schools make ASSET mandatory for evaluation of the student and ASSET results are included in the overall evaluation system of the school; that the same is confirmed by the agreement cum application form for ASSET also. 17. The applicant s contention is that ASSET, as an examination tool provided to the educational institution i.e. Schools is a services relating to conduct of examination by educational institution and it is exempted under Sr. No. 66 of Not. No. 12/2017-C.T. (Rate) dated 28.06.2017. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Condition 66 Heading 9992 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 midday meals scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; up to higher secondary : (v) supply of online educational journals or periodicals: 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 preschool education and education up to higher secondary school or equivalent : Provided further that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said agreement reveal that the applicant has made an agreement with School for supply of ASSET multiple question paper. Accordingly, we hold that the first condition has been fulfilled in respect of claim of subject exemption. 21. It is now to be seen whether the conditions mandated by entry 66 (b) (iv) of notification 12/2017-Central Tax as reproduced are fulfilled or not as far as the services relating to conduct of examination by, such institution; up to higher secondary. We find from the submissions of the applicant that they are supplying ASSET multiple questions to the School for taking the examination on students on yearly basis. Sample agreement submitted by the applicant vide clause 8 stipulates as under: It is expressly agreed that test undertaken by school under ASSET FS/FC are mandatory part of the examination and evaluation of the students and ASSET results will be taken into account for overall assessment done by the school. If the need arises the school shall issue a certificate to EI in this regards 21.1 On reading the above, it comes out that schools taking ASSET will use its results for its examination process and overall assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to the nation building process. Right to Education is now a fundamental right of every child in India. GST Law recognises this and provides exemption to educational institutions, providing education up to higher secondary school or equivalent, from the levy of GST. Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Other services related to education, not covered by the exemption, would be taxed at a standard rate of 18% with full admissibility of ITC for such taxable services in cases where the output service is not exempt. In a nutshell, every attempt is made to ensure that the core educational services are fully exempt from GST. 21.4 Therefore, we hold that services have been provided to the schools in relation to conduct of examination of students by such educational Institutes. We also take cognizance of case laws, CCE V/s Rajasthan State Chemical Works 1999(55) ELT 444 (SC); Union of India V/s Ahmedabad Electricity Co. Ltd. 2003(158) ELT 3(SC) and M/s. Doypack Systems (P) Ltd. Vs UOI 1988 (36) ELT 201, cited by the applicant, wherein Honorable Supreme Court, while interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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