Income received from Admission cancellation - Educational Institute

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..... Income received from Admission cancellation - Educational Institute
Query (Issue) Started By: - Naresh G Dated:- 31-3-2023 Last Reply Date:- 1-4-2023 Goods and Services Tax - GST
Got 3 Replies
GST
Sir, Need a clarification on the following. There is an education society which is registered Under Section 12AA of Income tax act. The institution is receiving regular income from admiss .....

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..... ion cancellation. And also getting income from Hostel fine (Other than hostel fees) from Students staying in hostel. Since there is no relation established in the educational institute and Student after admission cancellation, Whether the income received is taxable and can it be seen as tolerating an act/refraining from an act as per schedule I of CGST act. Reply By Amit Agrawal: The Reply: If .....

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..... cancellation fee / hostel fine is in nature of 'liquidated damages', no gst is applicable. However, one needs to take into account Board's circular No. Circular No. 178/10/2022-GST dated 3rd August, 2022 for holistic analysis including risks involved. W.r.t. Para 11 of said circular, if subject education society is not paying gst on main activities (i.e. admission & hostel fees / cha .....

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..... rges) on account of any exemption available, then also, it need not pay GST against these cancellation fees / hostel fines in terms of Board's reasoning given. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. Reply By Shilpi Jain: The Reply: A view can be taken that before the cancellation of admission the student relationship still .....

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..... exists. It is only after the admission is cancelled he/she is no longer a student. So it can also be regarded as a service to the student itself and thereby not taxable Also the exemption for the education sector in the past has been given liberal interpretation. Reply By Padmanathan Kollengode: The Reply: I agree with views of Amit Ji here. Reg Shilpi Ma'am's view, the Dept might take .....

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..... a stand that there was never a student relationship as admission did not take place at all. (without admitting how can he be a student)
Discussion Forum - Knowledge Sharing .....

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