Exemption for services to educational institutions limited to specified cases; manpower support to higher education and medical institutions is taxable.

Manpower services such as security, housekeeping and similar support services supplied to a hospital-cum-medical college and a state university were held not to fall within Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) or the corresponding State notification. The exemption was confined to services provided to an educational institution only in the limited cases covered by clause (b), and the proviso restricted that benefit to institutions providing pre-school education and education up to higher secondary level or equivalent. Because the recipients were involved in higher education and medical education, the exemption could not be extended by implication, and the services remained taxable.

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Issues: Whether manpower services provided to a hospital cum general medical college and a state university were exempt under Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and the corresponding State notification.

Analysis: The exemption under Sr. No. 66 applies to services provided to an educational institution only in the limited cases specified in clause (b), and the proviso restricts that benefit to institutions providing pre-school education and education up to higher secondary school or equivalent. The entry therefore does not extend to educational institutions imparting higher education, nor to medical institutions, when the service provider renders manpower services such as security, housekeeping, or similar support services.

Conclusion: The services supplied to the medical college and state university did not qualify for exemption and were taxable.

Ratio Decidendi: An exemption entry granting nil rate for services to educational institutions must be confined to the institutions and services expressly covered by its proviso and cannot be extended to higher education or medical institutions by implication.

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