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TMI Blog2020 (9) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... esh. 1. Brief Facts of the Case: 1. The appellant is a coaching Institute providing coaching to the students appearing for the Intermediate, CA Foundation Course, CA, CMA. 2. The appellants also provide hostel accommodation and catering services to the students. 3. The appellant claimed exemption from service tax during the service tax regime under the serial No. 66D(1)(ii) of the Negative List up to 01.03.2016 and under the Notification No.25/2012-ST dated 20.06.12, as amended thereafter as 'Education Institution' as per the definitions provided in the respective provisions detailed above. 4. It is the case of the appellants that since their service is providing education as part of a curriculum for obtaining Chartered Accountant, Cost Management Accountant as an educational Institution, they were exempted. No service tax was levied earlier under the Service Tax or leviable there to under the Goods and Service Tax enactments. In the above circumstances the Appellant approached the Advance Ruling Authority-Andhra Pradesh for Ruling on the following queries: 1. Whether the services of 'supply of service of education' as per the curriculum prescribed by the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itations cited by the appellant in the application. The impugned order is also passed in violation of judicial discipline as the same is passed without considering the decisions from various Courts and without even distinguishing them. 2. The learned authority misread the definition of the term 'educational institution' given in Notification No.12/2017-CT (Rate) dt.28.06.2017 which brought educational services out of the purview of GST, if supply provided is (a) related to education (b) the education is provided is as a part of a curriculum and (c) the education is provided for obtaining a qualification recognised by any law for the time being in force. If any of these conditions is not satisfied, the appellant shall not qualify to be eligible for the exemption. The appellant had clearly explained in his application how he fulfils all the above conditions and the appellant's detailed submissions were even recorded in para 4.10 to 4.27 of the impugned order the appellant's detailed submissions were recorded. But they are not controverted by the authority while passing the order but simply denied the exemption by passing a bald order. 3. The finding given by the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y did not consider the same. 6. The ground taken by the learned authority to deny the exemption to the coaching imparted by the appellant is that the said coaching does not lead to grant of any certificate recognised by law and therefore, it is not an educational institution. This is both factually and legally incorrect. The coaching to all the courses viz., CA-Inter, CA-Final, ICWA-Final and ICWA-Inter and Intermediate education leads to grant of certificates duly recognised under the law. This had been clearly explained in the application. Further, as explained clearly in the application, granting of a certificate is not a condition in the said Notification to claim the exemption and this condition was existing prior to 2011. This submission also though made was not at all considered. The impugned order was clearly passed with pre-determined mind set. 7. The learned lower authority had given the findings in the order traversing beyond the definition and meaning provided in the statute. The authority misread and misinterpreted them without considering the submissions made by the appellant with regards to rules for statutory interpretation which provide that an exemption Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of the child in the pursuits of literature. It also comprehends a proper attention to the moral and religious sentiments of the child. And it is sometimes used as synonymous with 'learning'." 9. The learned Authority erred in holding that since the appellant is not issuing any coaching completion certificate and since the student has the liberty to leave the institute, the appellant's institute cannot be considered as Educational Institution. This observation/ finding is not at all relevant while considering the exemption to the appellant. Once the appellant fits into the description of the term 'Educational Institution', other factors are irrelevant, as a student in a University can also discontinue his studies. The only relevant factor is that education imparted by the appellant is a part of curriculum for obtaining a statutory qualification. For this reason, a government college or university can also be held to be not an educational institution as students drop out from these colleges/ universities also. The denial of exemption to the supply of service of education is against the policy of the Government. Various circulars issued by the CBIC place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking a contrary view is not in consonance with the Government's consistent stand and therefore liable to be rejected. 12. Prior to introduction of GST, Service Tax was exempted on the education provided by an 'educational institution'. The relevant extract of Notification No.25/2012-ST dt.20.06.2012 was re-produced in Para 8.4 to 8.5 of the impugned order. The wordings are exactly same in the case of Notification 12/2017-CT (Rate) dt.28.06.201.7 which granted such exemption in GST. The appellant was accordingly allowed the exemption during the Service Tax regime and the orders passed by the Commissioner of Service Tax was accepted by the committee of Chief Commissioners including one of the Hon'ble Members of this Appellate Authority. It is highly improper to deny the same under GST when identical exemption is provided that too when the adjudication orders passed in his favour were accepted by the Committee of Chief Commissioners and even refund of the service tax paid was sanctioned to him. The Hon'ble Tribunal in the case of Sri Chaitanya Educational Committee Vs. CCE, Guntur [2018(4) TMI 664-CESTAT-Hyd] examined the provisions of various periods and held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce clause (i) of the definition does not mention about leading to grant of any qualification or certificate. Same is extracted below again for ready reference: '2(oa): Educational institution means an institution providing service by way of: Pre-school education and education up to higher secondary school or equivalent. 14. The Hon'ble Authority denied the exemption sought for in respect of accommodation referring to the Board Circular dt. 01.01.2019 and Entry No. 66 of the said Notification. The appellant referred to Board Circular dt.12.02.2018 while seeking the Ruling. Even if the appellant is not treated as an educational institution, there is no bar in granting exemption to the students for providing accommodation since the charges collected from them are less than Rs. 1000/- per day. This issue is not at all considered by the learned authority. 15. The authority also erred in denying the exemption for providing catering to students on the ground that the appellant is not an 'educational institution'. 16. The appellant supplies printed books to the students and their value do not form part of the value of the education service provided by him. Invoices ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly claimed exemption from service tax since the coaching provided by him is in relation to education provided to the students; the coaching is provided strictly following the curriculum prescribed by the concerned statutory institutions and the coaching is for obtaining a qualification recognised under law. The service tax department issued periodical show cause notices demanding service tax on the services on the grounds, inter alia, that the appellant was not issuing certificates to the students; that he is not recognised institutions etc., and hence not eligible for the exemption. These demands were subsequently dropped as far as coaching for Intermediate course, CA- Final and CMA- Final. The orders were accepted by the Committee of Chief Commissioners also and the service tax collected by the department was accordingly refunded. 4. The above arguments that the appellant is to be recognised with ICAI and ICWAI; he should issue certificates etc., were not accepted by the adjudicating authority in the order dt.23.05.2019 issued for the period from April 2013 to March 2017. In fact, the demands were dropped when there was a condition that the coaching shall lead to certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Details of coaching he provides, the syllabus he follows as per the one prescribed by the statutory bodies, the qualifications the students obtain after passing the exams with the education provided by the appellant, along with relevant documents viz., certificates, curriculum etc.,. (c) How it falls within the four corners of the definition of the term 'educational institution' as per the principles of interpretation of legal provisions and notifications etc., (d) Copies of documents showing that he is recognised as an educational institution by other government departments. 9. The appellant had also submitted that the jurisdictional Tribunal (CESTAT) at Hyderabad in the case of Sri Chaitanya Educational Committee had dropped the demand of service tax holding that the institute giving coaching to similar courses fall under the definition of the term 'educational institution' and there is no such condition of recognition etc., but this case law like other decisions is not considered by the ARA. 10. The learned ARA, however, gave a ruling vide the impugned order stating that the appellant is not an educational institution for the following reasons. (a) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 98 (2) applies not only to the enquiry by the state tax authorities but even to the enquiry/ investigation being conducted by the central tax authorities. (b) The learned ARA himself admitted in the order in the first page itself that the appellant is a leading educational institution and the coaching provided by him enables the students to appear for the examinations conducted by respective statutory bodies and to obtain necessary qualifications. He cannot pass the order with conflicting statements. (c) The learned ARA himself mentioned that identical exemption is provided under GST regime and service tax regime. In such case, when the issue is closed during service tax regime, same cannot be overturned for GST purpose for the sake of granting a negative ruling keeping the revenue in mind being quasi-judicial authorities. He passed the impugned order-though relying on the order of the Commissioner of Central Tax dropping the demand of service tax with detailed findings but negating the same acting as an appellate authority. (d) The learned ARA without going into the issue whether the applicant falls within the definition of the term 'educational institution' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ualification recognised by law and would therefore, not come within the exemption under subsection (27) of Section 65 of the Finance Act, 2003. It was also argued that though parallel colleges were granted the same benefits as University affiliated regular colleges, the assessee herein has activities other than preparing students for University degrees, diplomas and certificates or those issued from institutes, legally recognised. The assessee prepares students for entrance tests, competitive tests for employment, etc., all of which are commercial in nature bringing it under the tax net. 13. The assessee herein is also imparting education to obtain recognised degrees/ diplomas from Universities and that apart the students are also being provided training to appear for competitive examinations. entrance tests, etc. It is not necessary that the respondent-firm should issue a certificate, diploma or degree. The students given coaching by the appellant are issued with certificates, diplomas and degrees, as issued by the Universities, identical to regular colleges and parallel colleges also. The students are being prepared for courses and are imparted training to appear for competitiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) To pass order declaring the appellant as an educational institution and (e) To pass such other order or orders as may be deemed fit in the interest of justice. 5. Discussion and Findings: We have gone through the entire submission made by the appellant along with the Ruling pronounced by the Authority for Advance Ruling. On perusal of the appeal and submission made by the appellant at the time of Personal Hearing, it is observed that the main issue of contention is whether the appellant is an educational institution or not. In order to resolve the contentions, it is necessary to look at the scheme of education for CA/CMA as detailed under; a) Chartered Accountant is a designation given to an accounting professional who has received certification from a statutory body that he/she is qualified to take care of the matters related accounting and taxation of a business, like file tax returns, audit financial statements and business practices, maintaining records of investments, preparing and reviewing financial reports and documents. A Chartered Accountant is also qualified to offer advisory services to clients which include companies and individuals. b) Becoming a certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... training but to complete the same before being eligible to appear in the Final Examination. A student can complete the Course on Advanced Information Technology (AICITSS) from any of the ITT Centers established at Regional Offices/ Branches/ Chapters of ICAI. I) Similarly, ICMAI is the Institute of Cost Accountants of India (ICAI), which was previously known as the Institute of Cost and Work Accountants of India (ICWAI). There are three stages to be pursued to become a Cost and Management Accountant. The First stage is the Foundation Course, the second stage is the Intermediate Course and the last stage is the Final course. The Admission/Registration for the CMA course is open throughout the year, however, the candidates need to complete the registration process before the cutoff date. Candidates after passing the CMA Final exam are eligible for Membership of ICAI. The above findings reveal that the Board of Studies (BOS in short) is a wing created by the Institute of Chartered Accountants of India (ICAI in short). The BOS is imparting theoretical education for CA through online courses, Journals etc., to the enrolled candidates. Similarly the ICWAI is conducting classes throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, your get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But that is not the sense in which the word "education" is used in clause (15) of section 2. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by formal schooling." The Supreme Court in the case of Nidhi Kaim v. State of M.P., (2016) 7 SCC 615, "for the proposition that the examination is considered as a common tool around which the entire education system revolves" As indicated herein before, the institution is being run for a specific purpose to the extent to cover the topics in the subjects of the prescribed Syllabus for CA/CMA, namely, to prepare the students for appearing in various level of theoretical examinations for the said qualification, but it itself appears to be not authorized, there for, nor can it be said to be sufficient t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not even permitted to use any name or nomenclature which is in any way similar to that of the said Institutes. In this context, Section 15 A of the Chartered Accountants Act, 1949 and Section 15 B of the Cost and Works Accountants Act, 1959 regarding imparting education by Universities and other bodies were incorporated in the respective Acts in the year 2006. The sections have identical wordings and are reproduced hereunder for reference: 15A. (ICAI Act) Imparting education by Universities and other bodies (1) Subject to the provisions of this Act, any University established by law or any body affiliated to the Institute, may impart education on the subjects covered by the academic courses of the Institute. (2) The Universities or bodies referred to in sub-section (1) shall, while awarding degree, diploma or certificate or bestowing any designation, ensure that the award or designation do not resemble or is not identical to one awarded by the Institute. (3) Nothing contained in this Section shall enable a University or a body to adopt a name or nomenclature which is in any way similar to that of the Institute. 15B. (ICWAI) Imparting education by Universities and other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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