2022 (7) TMI 408 - AAR - GST

Karnataka Secondary Education Examination Board lacks standing to seek GST advance ruling on printing services classification

The AAR Karnataka dismissed an advance ruling application filed by the Karnataka Secondary Education Examination Board regarding GST classification and ... Educational institution - conduct of examination - advance ruling - supply of service - recipient of services - nil rate of tax - applicability of notificationEducational institution - conduct of examination - applicability of notification - The Applicant is an educational institution for the limited purpose of providing services by way of conduct of examination to the students. - HELD THAT: - Notification No.14/2018-Central Tax (Rate) (clause (iv)) clarifies that Central and State Educational Boards shall be treated as educational institutions for the limited purpose of providing services by way of conduct of examination to students. Applying that clarification to the facts that the Karnataka Secondary Education Examination Board is established to hold and conduct public examinations, the Authority holds that the Board is an educational institution for the limited purpose specified in the Notification. [Paras 10]Applicant is an educational institution for the limited purpose of conducting examinations.Advance ruling - supply of service - recipient of services - Ruling on whether the applicant is the supplier of printing and incidental services or whether such services qualify for Nil rate cannot be given because the applicant is not the supplier of the services for which advance ruling is sought. - HELD THAT: - Sections defining the scope of advance ruling (Section 95 read with Section 97 procedures) limit the Authority to deciding matters in relation to the supply of goods or services being undertaken or proposed to be undertaken by the applicant. The record and sample agreements indicate that the Applicant is the recipient of the printing and incidental services (outsourced to third parties through tender/competitive bidding) and not the supplier. Since an advance ruling can be issued only to a person in respect of supplies undertaken or proposed to be undertaken by that person, the Authority refrains from answering questions that require a ruling on supplies where the applicant is not the supplier. [Paras 13, 14, 15]Questions on whether printing constitutes a supply by the applicant and whether incidental services are covered by Sr. No.66 (Heading 9992) and attract Nil rate cannot be answered because the applicant is not the supplier; therefore the Authority refrains from issuing a ruling on those questions.Final Conclusion: The Authority rules that the Karnataka Secondary Education Examination Board is an 'educational institution' for the limited purpose of conduct of examinations as per Notification No.14/2018; however, it declines to answer the remaining questions on printing and incidental services and their Nil-rate applicability because the Applicant is the recipient, not the supplier, and advance rulings are confined to supplies undertaken or proposed to be undertaken by the applicant. Issues Involved:1. Whether the Applicant is an 'educational institution' for the purposes of applicability of GST.2. Whether the activity of printing certain examination-related stationery on behalf of educational institutions constitutes a supply of service.3. Whether incidental services provided to or performed on behalf of educational institutions are covered by Sr. No. 66 (Heading 9992) of Notification No. 12/2017-Central Tax (Rate) and subject to Nil rate of tax.Issue-wise Detailed Analysis:1. Educational Institution Status:The Applicant, Karnataka Secondary Education Examination Board (KSEEB), sought to determine if it qualifies as an 'educational institution' under GST law. The Authority referred to Notification No. 14/2018-Central Tax (Rate) dated 26.07.2018, which clarifies that Central and State Educational Boards are treated as educational institutions for the limited purpose of providing services by way of conducting examinations to students. Consequently, the Authority concluded that KSEEB is indeed an educational institution for this limited purpose.2. Printing Activity as Supply of Service:The Applicant queried whether the activity of printing items such as question papers, admit cards, answer booklets, SSLC Pass Certificates, Fail Marks cards, etc., on behalf of educational institutions constitutes a supply of service. The Authority observed that the printing activities are outsourced to third parties, making the Applicant the recipient, not the supplier, of these services. Therefore, the Authority refrained from providing a ruling on this question, as advance rulings can only be sought in relation to supplies undertaken or proposed to be undertaken by the applicant.3. Incidental Services and Nil Rate of Tax:The Applicant also sought clarification on whether incidental services, such as scanning answer booklets, hiring vehicles for transportation of examination materials, annual maintenance of computers, and obtaining services of programmers, technical staff, and other personnel for examination-related work, are subject to Nil rate of tax under Sr. No. 66 (Heading 9992) of Notification No. 12/2017-Central Tax (Rate). The Authority reviewed sample agreements and determined that the Applicant is the recipient, not the supplier, of these incidental services. As such, the Authority refrained from giving a ruling on this matter for the same reason as the second issue.Ruling:1. The Applicant is an 'Educational institution' for the limited purpose of providing services by way of conducting examinations to students, as per clause (iv) of Notification No. 14/2018-Central Tax (Rate) dated 26.07.2018.2. The question regarding the activity of printing certain examination-related stationery on behalf of educational institutions could not be answered.3. The question regarding incidental services provided to or performed on behalf of educational institutions could not be answered.