GST Ruling: Subscription to J-Gate by Educational Institutions Not Exempt

The Authority for Advance Ruling determined that the supply of services in the form of subscription to J-Gate by educational institutions does not qualify for GST exemption under Notification No.2/2018-Central Tax (Rate). The applicant's activity of aggregating and providing access to articles from various journals was classified as online text-based information services, subject to 9% tax under SAC 998431 for CGST and KGST. The ruling clarified that the service did not meet the criteria for exemption as online educational journals and periodicals, falling under the category of telecommunications, broadcasting, and information supply services.

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Issues:
1. Eligibility for GST exemption on supply of services in the nature of subscription to J-Gate by educational institutions.

Analysis:
The applicant sought an advance ruling on whether the supply of services in the form of subscription to J-Gate by educational institutions is eligible for GST exemption under Notification No.2/2018-Central Tax (Rate). The applicant, a company supplying online journals through the J-Gate platform, argued that as per the notification, the supply of online journals to educational institutions is exempt from GST. They contended that J-Gate should be considered an online journal similar to Tax India Online and GST Law Times, and hence, subscription fees from educational institutions should be exempt. The applicant highlighted that J-Gate indexes scholarly journals and provides aggregated access to educational material, qualifying it as a journal. However, the Authority for Advance Ruling examined the nature of the applicant's services and concluded that they provide access to articles from various journals without publishing any journals themselves. The applicant's activity was deemed as aggregation and supply of educational material prepared by others, not falling under the exemption for supply of online educational journals and periodicals. Therefore, the ruling determined that the applicant's service falls under SAC 998431, taxable at 9% CGST and KGST.

The Authority considered the applicant's submissions and additional facts presented during the hearing. It was observed that the applicant's platform serves as a gateway to articles published in various journals, with subscribers accessing individual articles through the platform. The applicant does not publish journals but aggregates articles from various sources, creating a reference database. The ruling emphasized that the applicant's role is in compiling prepared data, acting as an aggregator and platform for information supply. The applicant's service was distinguished from the supply of online educational journals and periodicals, falling under the category of online text-based information services. As per the classification, the service provided by the applicant was considered liable for 9% tax under the relevant notifications. The ruling clarified that the applicant's activity did not meet the criteria for GST exemption on supply of online educational journals and periodicals to educational institutions, classifying it under telecommunications, broadcasting, and information supply services.

In conclusion, the Authority for Advance Ruling ruled that the provision of access to online content by the applicant to users is categorized under SAC 998431, subject to 9% tax under the specified notifications for CGST and KGST. The ruling clarified that the applicant's service did not qualify for GST exemption on supply of online educational journals and periodicals to educational institutions, as it was deemed to fall under the classification of online text-based information services.

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