Ruling: Applicant's Coaching Service Classified as 'Supply of Service' under CGST Act, 2017

The ruling determined that the supply by the applicant is classified as a "Supply of Service" under the CGST Act, 2017. It was further established that the supply constitutes a Composite Supply, with coaching services being the principal supply. The applicant was identified as the service provider to the students, while the network partner was deemed the service provider to the applicant. The value of the service provided was to be based on the total consolidated amount charged to students. Additionally, both the applicant and the network partner were confirmed eligible to avail Input Tax Credit under the GST Act, 2017.

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Issues Involved:
1. Classification of supply (goods or services)
2. Determination of composite supply and principal supply
3. Identification of supplier and recipient of service
4. Valuation of services provided
5. Eligibility for Input Tax Credit (ITC)

Detailed Analysis:

1. Classification of Supply (Goods or Services):
The applicant supplies coaching services to students, which include printed material, test papers, uniforms, bags, and other goods. These supplies are not charged separately but as a consolidated amount, with the major component being coaching. The ruling determined that such supply should be considered a "Supply of Service" as per Section 7(1) of the CGST Act, 2017, since the transaction is primarily for coaching services with ancillary goods provided.

2. Determination of Composite Supply and Principal Supply:
The ruling examined whether the supply is a Composite Supply or a Mixed Supply. As per Section 2(30) of the GST Act, 2017, a composite supply involves two or more taxable supplies naturally bundled and supplied in conjunction with each other in the ordinary course of business, with one being the principal supply. The principal supply is defined under Section 2(90) of the CGST/SGST Act, 2017. In this case, the predominant element is the coaching service, making the entire supply a composite supply with coaching as the principal supply. The tax liability on such composite supply is determined as per Section 8 of the CGST/SGST Act, 2017, where the tax rate applicable to the principal supply (coaching service) will be applied to the entire composite supply.

3. Identification of Supplier and Recipient of Service:
Under the business model, the applicant provides coaching services through Network Partners. The network partner provides services to students on behalf of the applicant. The ruling clarified that:
- The applicant is the service provider to the students.
- The network partner is the service provider to the applicant.

4. Valuation of Services Provided:
The value of the service provided by the applicant to students and by the network partner to the applicant is determined under Section 15 of the CGST Act. The value of taxable supply includes the transaction value, which is the price actually paid or payable for the supply. Since the applicant incurs the cost of goods supplied to students (e.g., bags, study material), the consolidated amount charged to students, for which a tax invoice is issued, shall be the taxable value.

5. Eligibility for Input Tax Credit (ITC):
As per Section 16(1) of the CGST Act, every registered person is entitled to take credit of input tax charged on any supply of goods or services used in the course or furtherance of business. The ruling confirmed that both the applicant and the network partner can avail eligible ITC for their respective supplies as per the provisions of the GST Act, 2017.

Ruling Summary:
1. The supply by the applicant will be considered a "Supply of Service."
2. The supply shall be considered a Composite Supply, with coaching service as the principal supply.
3. The applicant will be the service provider to the students, and the network partner will be the service provider to the applicant.
4. The total consolidated amount charged, for which the applicant generates a tax invoice, will be the value of the service supply by the applicant.
5. The applicant can avail eligible ITC as per the provisions of the GST Act, 2017.

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