GST exemption denied for private coaching; bundled hostel and textbook supplies taxed as composite supply under principal coaching service.
Private coaching and training for competitive or professional examinations did not qualify as exempt services of an "educational institution" because the provider was neither conducting recognised education nor granting a qualification recognised by law; the coaching activity was therefore taxable under GST. The services were correctly classified as commercial training and coaching under SAC 9992-999293. Examination-fee collections could be excluded from taxable value only if the prescribed pure-agent conditions were satisfied. Hostel facility and textbook supplies, being bundled with the coaching activity, formed part of a taxable composite supply, with coaching as the principal supply.
Issues: (i) Whether the appellant's education and training programmes were exempt as services by an educational institution under the GST exemption notification; (ii) what was the correct service accounting classification of the appellant's services; (iii) whether examination fee collections were excludible from taxable value as pure-agent receipts; (iv) whether hostel facility and sale of text books to enrolled students formed part of a composite supply taxable as the principal service.
Issue (i): Whether the appellant's education and training programmes were exempt as services by an educational institution under the GST exemption notification.
Analysis: The exemption applied only to an institution providing education up to higher secondary level, or education as part of a curriculum for obtaining a qualification recognised by law, or an approved vocational course. The appellant was found to be a private coaching institute imparting training for competitive/professional examinations and not itself conducting examinations or granting any qualification recognised by law. The services therefore did not satisfy the definition of educational institution for exemption purposes.
Conclusion: The services were not exempt from GST and the finding is against the appellant.
Issue (ii): What was the correct service accounting classification of the appellant's services.
Analysis: The appellant's activity was held to be coaching and training for imparting skill, knowledge and lessons, which falls within the service classification for commercial training and coaching services under the GST classification scheme.
Conclusion: The services were correctly classified under SAC 9992-999293, against the appellant.
Issue (iii): Whether examination fee collections were excludible from taxable value as pure-agent receipts.
Analysis: The value of supply includes the consideration received by the supplier, but amounts collected as examination fees or similar charges may be excluded where the supplier satisfies the conditions for acting as a pure agent. The exclusion was therefore made conditional upon compliance with the prescribed rule.
Conclusion: The amount could be excluded only if the pure-agent conditions were met, and the issue was decided partially in favour of the appellant.
Issue (iv): Whether hostel facility and sale of text books to enrolled students formed part of a composite supply taxable as the principal service.
Analysis: The hostel facility and books were treated as supplies bundled with the coaching service in the course of business, with the coaching service identified as the principal supply. On that basis, the entire bundle was held taxable at the rate applicable to the principal supply. The exemption claimed for hostel accommodation was rejected because the relevant exemption entry did not apply to the classification adopted. The same reasoning was applied to the supply of text books to students.
Conclusion: Hostel charges and sale of text books formed part of a taxable composite supply, against the appellant.
Final Conclusion: The appellate ruling affirmed the denial of exemption for the coaching activity and upheld the tax treatment of the bundled supplies, with only a conditional exclusion for examination-fee collections where pure-agent requirements are satisfied.
Ratio Decidendi: Private coaching services that do not themselves constitute education leading to a qualification recognised by law are not "educational institution" services for GST exemption, and ancillary supplies bundled with such coaching may be taxed as part of a composite supply under the principal service.