2022 (5) TMI 1072 - AAAR - GST

State Examination Board gets GST exemption as educational institution for most exams under Notification 12/2017

In Re: M/s. State Examination Board,

The AAAR Gujarat held that the appellant State Examination Board qualified as an educational institution for GST exemption purposes under Sl. No. 66(aa) ... Benefit of exemption - Educational services - services supplied for the exams mentioned at Sr.No.9 to 15 of the list of exams - eligibility to claim exemption benefit under Sr.No.66(a) & (aa) of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 - whether the appellant is eligible for exemption as available under Sl. No. 66 of Notifications No. 12/2017 – Central Tax (Rate) dated 28.06.2017? - HELD THAT:- On-going through the aforesaid entry of the said notification, it is found that the said notification has been amended vide notifications No.02/2018-Central Tax(Rate) dated 25.01.2018 and new item (aa) is inserted after item (a) in the entry in column (3) i.e. in Description of Services. The appellant also referred Circular No. 151/07/2021-GST dated 17th June 2021 and submitted that State Examinations Board should be given the same recognition of “Educational Institution” as is given to NBE. In the said circular, Central Board such as National Board of Examination (NBE) is construed as “Educational Institution” in so far as it provides services by way of conduct of examinations, including any entrance examination, to the students - these exams do not provide employment to the successful candidates, but make the successful candidates eligible for the posts of the jobs of teachers or lecturers. As all criteria are complied with and the State Examination Board being the ‘educational institution’ in so far as it provides services by way of conduct of exams at Sr. No. 1 to 12 in the list given at para 26 above, it is observed that the appellant is eligible to avail the benefit of exemption under Sl. No. 66 (aa) of Notifications No. 12/2017 – Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 1 to 1. Whether the appellant is eligible to claim exemption benefit under the Sl. No. 5 of the Notifications No. 12/2017 – Central Tax (Rate) dated 28.06.2017 for exams given at Sr. No. 13 and 14? - HELD THAT:- In the instant case, the AAR stated that the activity of conducting examinations by the appellant squarely falls under Heading 9992 (which covers Education Services) and further held that ‘State Examination Board’ can be considered as “Governmental Authority” - ‘education’ can be considered as the act or process of imparting knowledge, especially at a school, college or university. This act of imparting knowledge also includes all the matters relating to imparting and controlling education. The appellant is not eligible to avail the benefit of exemption under Sl. No. 5 of Notifications No. 12/2017 – Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 13 to 14. Departmental exam at Sl. No. 15 in the list given at para 26, cannot be covered either under Sl. No. 5 or under Sl. No. 66 (a) and (aa) of the exemptions Notifications No. 12/2017 – Central Tax (Rate) dated 28.06.2017 and therefore, appellant is not eligible to claim the exemption benefit. Issues Involved:1. Eligibility for exemption under Sl. No. 66 (aa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 1 to 12.2. Eligibility for exemption under Sl. No. 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 13 and 14.3. Applicability of GST on departmental examinations at Sr. No. 15 and whether they fall outside the scope of section 7 of the CGST Act.Detailed Analysis:Issue 1: Eligibility for Exemption under Sl. No. 66 (aa)The appellant sought exemption under Sl. No. 66 (aa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 1 to 12. The notification was amended to include item (aa) which exempts services provided by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee. The term 'educational institution' is defined to include institutions providing services by way of education up to higher secondary school or equivalent, education as part of a curriculum for obtaining a qualification recognized by law, and approved vocational education courses.The appellant argued that the State Examination Board qualifies as an 'educational institution' based on the amendment and Circular No. 151/07/2021-GST dated 17th June 2021, which recognized Central and State Educational Boards as educational institutions for conducting examinations. The Board conducts exams that make candidates eligible for teaching positions and other educational roles, fulfilling the criteria of having a specific curriculum, recognized qualifications, and assigned tasks for conducting exams.Conclusion:The appellant is eligible for exemption under Sl. No. 66 (aa) for exams at Sr. No. 1 to 12 as they meet the criteria of being educational services recognized by law and conducted by an educational institution.Issue 2: Eligibility for Exemption under Sl. No. 5The appellant sought exemption under Sl. No. 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 for exams at Sr. No. 13 and 14. Sl. No. 5 exempts services by a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution, including education.The appellant argued that conducting exams like Diploma in Home Science and GCC Type Steno falls under the function of education entrusted to Panchayats. However, the appellant failed to provide details of specific curriculum or legal recognition of these qualifications. The judgment noted that primary and secondary school education is always recognized by law, but the appellant did not demonstrate that these specific programs are legally recognized educational qualifications.Conclusion:The appellant is not eligible for exemption under Sl. No. 5 for exams at Sr. No. 13 and 14 as they did not provide sufficient evidence of legal recognition or specific curriculum.Issue 3: Applicability of GST on Departmental ExaminationsThe appellant argued that conducting departmental exams (Sr. No. 15) is outside the scope of section 7 of the CGST Act as there is no consideration received either from candidates or the government. The appellant sought to determine if these services fall under the exemptions in Notification No. 12/2017-Central Tax (Rate).The judgment clarified that the issue was regarding the applicability of the notification to departmental exams. Since departmental exams do not fall under either Sl. No. 5 or Sl. No. 66 (a) & (aa) of the notification, the appellant is not eligible for exemption.Conclusion:The appellant is not eligible for exemption for departmental exams under Sl. No. 5 or Sl. No. 66 (a) & (aa) of Notification No. 12/2017-Central Tax (Rate).Final Ruling:1. The appellant is eligible for exemption under Sl. No. 66 (aa) for exams at Sr. No. 1 to 12.2. The appellant is not eligible for exemption under Sl. No. 5 for exams at Sr. No. 13 and 14.3. The appellant is not eligible for exemption for departmental exams under Sl. No. 5 or Sl. No. 66 (a) & (aa).