2019 (3) TMI 1012 - AAAR - GST

Appellate Authority Upholds Decision on GST Exemption for UCMAS Abacus Activities

In Re: M/s. Omnisoft Technologies Private Limited

In Re: M/s. Omnisoft Technologies Private Limited - 2019 (22) G.S.T.L. 589 (App. A. A. R. - GST) Issues:1. Qualification for exemption from GST for activities provided by UCMAS using abacus.Analysis:Issue 1: Qualification for exemption from GST for activities provided by UCMAS using abacusThe appellant, M/s. Omnisoft Technologies Pvt. Ltd., submitted that the UCMAS program enhances children's mental abilities through tools like ABACUS, Arts, and Various Memory enhancing Techniques. UCMAS is a child development program based on Visual Arithmetic and Abacus, aiming to boost brainpower in children aged 4-13 years. The appellant sought an advance ruling from the Gujarat Authority for Advance Ruling (GAAR) on whether the activity provided by UCMAS using abacus qualifies for exemption from GST.The GAAR ruled that M/s. Omnisoft Technologies Pvt. Ltd. is not entitled to the exemption provided under specific notifications related to GST. The appellant, aggrieved by this ruling, filed an appeal challenging the decision. The appellant cited previous judgments from CESTAT cases with similar facts to support their claim for exemption. However, the GAAR differentiated the previous cases based on the scope and applicability of the notifications in question.Upon examination, it was found that the notifications cited by the appellant pertained to different activities and did not align with the specific exemption criteria under the relevant GST notification. The GAAR emphasized that the activities of the appellant did not fall under the category of recreational activities relating to art or culture, as required for exemption. The GAAR's interpretation of the term 'Art' was upheld, and it was concluded that the appellant's activities did not qualify as training or coaching in recreational activities relating to art.The appellant further argued that the GAAR misinterpreted the classification under the GST regime, specifically referring to Service Accounting Code 9996 in the relevant notification. However, the appellant failed to provide substantial evidence to demonstrate that their activities fell within the specified exemption criteria. It was reiterated that exemption notifications must be strictly interpreted, and in the absence of clear eligibility, benefits cannot be extended.Ultimately, the appellate authority confirmed the GAAR's ruling, rejecting the appeal filed by M/s. Omnisoft Technologies Pvt. Ltd. The judgment emphasized the importance of aligning activities with specific exemption criteria outlined in GST notifications and the need for clear eligibility to claim exemptions effectively.