UK subsidiary's IELTS exam support services classified as composite supply under service code 999299, attracting 18% GST rate.

AAR Haryana ruled that exam support services provided by a subsidiary of a UK organization for conducting IELTS exams constitute a composite supply rather than mixed supply. The services including exam support and student facilitation are bundled together without independent existence. The principal supply being conducting exams is classified under service code 999299 as education support service, attracting 18% GST (9% CGST and 9% SGST) under notification 11/2017-Central Tax dated 28.06.2017 and corresponding state notification 46/ST-2 dated 30.06.2017.

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Issues Involved:
1. Nature of supply - Mixed supply or composite supplyRs.
2. Applicable rate of GST on exam support services.
3. Place of supply of exam support services.

Nature of Supply - Mixed Supply or Composite Supply:
The Applicant sought an advance ruling on whether the activities involved in the exam support services constitute a mixed supply or a composite supply. The Assistant Commissioner opined that the services proposed to be provided by the Applicant constitute a composite supply of conducting exams and other back-end support services. The Applicant argued that the services are bundled together, with the principal supply being the conduction of exams, classifiable as educational support services under the GST regime. The Authority for Advance Ruling concurred, determining that the activities involved in the exam support services are a composite supply. The services were classified under Service Code 999299 Group 99929 and Heading 9992, taxable at 18% GST.

Applicable Rate of GST on Exam Support Services:
The second issue raised was regarding the rate of GST applicable to the exam support services. As the principal supply was identified as the conduction of IELTS exams, it was classified under education support services, attracting an 18% GST rate (9% CGST and 9% HGST). This determination was made based on the specific provisions of the GST law and the nature of the services provided under the agreement between the Applicant and the British Council, UK.

Place of Supply of Exam Support Services:
Although the Applicant also inquired about the place of supply of the exam support services, this question was not admitted for an advance ruling. The Authority clarified that its rulings were specific to the State, and the determination of the place of supply fell outside its scope. Therefore, the ruling was limited to addressing the nature of supply and the applicable GST rate on the exam support services. The decision on the admissibility of the application and the subsequent findings were based on a detailed examination of the agreement and relevant legal provisions.

This comprehensive analysis of the judgment by the Authority for Advance Rulings in Haryana provides clarity on the classification of services, tax implications, and the limitations of the ruling authority in addressing certain aspects of the GST regime. The ruling emphasizes the importance of understanding the nature of supply and the relevant GST rates to ensure compliance with the tax laws governing such transactions.

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