GST Exemption for AAPC Exam Fees & Fee Payment Facilitation Services

The applicant's collection and payment of examination fees to AAPC on behalf of students enrolled in their training program are not subject to GST, meeting the conditions under Rule 33 of CGST Rules 2017. Similarly, for outside students not enrolled in their program, the applicant's fee payment facilitation service without consideration falls outside the scope of taxable supply under Section 7 of the CGST Act, thus not attracting GST liability. However, the authority lacks jurisdiction to issue a ruling on the applicant's request to follow a specific advance ruling due to the limited scope of matters for which advance rulings can be issued.

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Issues Involved:
1. GST liability on collection and payment of examination fees to AAPC for students enrolled in the applicant's training program.
2. GST liability on collection and payment of examination fees to AAPC for outside students not enrolled in the applicant's training program.
3. Applicability of Karnataka Advance Ruling in M/s. Arivu Educational Consultants Pvt. Ltd. to the applicant's case.

Issue-wise Detailed Analysis:

1. GST Liability on Collection and Payment of Examination Fees to AAPC for Students Enrolled in the Applicant's Training Program:

The applicant, engaged in providing training for students in medical coding, also facilitates the payment of examination fees to AAPC for its students without charging any additional fee. The applicant sought clarity on whether this activity attracts GST liability.

The ruling examined Rule 33 of the CGST Rules, 2017, which stipulates that costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply if certain conditions are met:
- The supplier acts as a pure agent on behalf of the recipient when making the payment.
- The payment made by the pure agent is separately indicated in the invoice.
- The supplies procured by the pure agent are in addition to the services supplied on their own account.

In this scenario, the applicant collects examination fees from students enrolled in their training program and remits the same to AAPC. The applicant meets all conditions under Rule 33, as they act on behalf of the students, the payment is separately indicated, and the service of facilitating payment is in addition to the training services provided. Thus, the collection and payment of examination fees to AAPC by the applicant for enrolled students are not liable to GST.

2. GST Liability on Collection and Payment of Examination Fees to AAPC for Outside Students Not Enrolled in the Applicant's Training Program:

For students not enrolled in the applicant's training program, the applicant still facilitates the payment of examination fees to AAPC without charging any service fee. The ruling again referred to Rule 33 of the CGST Rules, 2017, and Section 7 of the CGST Act, 2017, which defines "supply" as an activity/transaction for a consideration in the course or furtherance of business.

In this case, the applicant provides the fee payment facilitation service without any consideration. Since the service is provided without consideration, it falls outside the scope of "supply" as defined in Section 7 of the CGST Act. Therefore, the applicant is not liable to pay GST on the fee payment facilitation services provided to outside students without consideration.

3. Applicability of Karnataka Advance Ruling in M/s. Arivu Educational Consultants Pvt. Ltd.:

The applicant sought to follow the essence of the Karnataka Advance Ruling in M/s. Arivu Educational Consultants Pvt. Ltd., which held that the activity of collecting and remitting exam fees without value addition is a service as a pure agent and excluded from taxable value under Rule 33.

However, the ruling clarified that as per Section 97(2) of the CGST Act, the authority can only issue advance rulings on specific matters such as classification of goods/services, applicability of notifications, determination of time and value of supply, admissibility of input tax credit, determination of tax liability, registration requirements, and whether an activity amounts to supply. Since the question does not fall within these specified matters, the authority does not have jurisdiction to issue a ruling on this question.

Ruling:

1. The collection and payment of examination fees to AAPC by the applicant on behalf of students enrolled in their training program is not liable to GST, subject to the fulfillment of conditions under Rule 33 of CGST Rules 2017.
2. The collection and payment of examination fees to AAPC by the applicant on behalf of outside students (not enrolled in their training program) without collecting any service charge is not liable to GST for the reasons detailed in Para 7.7.
3. The authority does not have jurisdiction to issue a ruling on whether the applicant can follow the Karnataka Advance Ruling in M/s. Arivu Educational Consultants Pvt. Ltd. as detailed in Para 7.8.

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