Separately sold study materials are excluded from coaching service tax value, with exemption available for the sale component.
Where commercial training and coaching services are supplied with books and study materials sold under separate receipts at separately stated prices, the value of those materials is not includible in the taxable value of the service. The note further states that the benefit of Notification No. 12/2003-ST remains available for the sale component when the materials are separately sold and no Cenvat credit is taken on them. The effect is that the service tax base is confined to the coaching service element, while the distinct sale of study material is excluded.
Issues: Whether, for services rendered under the category of Commercial Training and Coaching Services, the value of course material and books sold separately was required to be included in the taxable value, and whether exemption under Notification No. 12/2003-ST was available in respect of such sale value.
Analysis: The dispute was covered by an earlier decision in the assessee's own case, which had held that where study materials and books were supplied against separate receipts and their price was separately indicated, the value attributable to such sale could not be added to the value of taxable services. The earlier decision further held that denial of the benefit of Notification No. 12/2003-ST was not sustainable where the materials were separately sold and no Cenvat credit was taken on them.
Conclusion: The value of separately sold books and study materials was not liable to be included in the taxable value, and the benefit of Notification No. 12/2003-ST was available. The appeal was allowed in favour of the assessee.
Ratio Decidendi: Where books and study materials are separately sold for a distinct price in connection with taxable coaching services, their value is not includible in the taxable value of the service and exemption for the sale component cannot be denied merely because the supply is connected with the coaching activity.
TaxTMI 
AI Drafter ✕
TaxTMI 
TaxTMI 
