2022 (10) TMI 865 - AAR - GST

Online coaching platforms don't qualify as educational institutions under GST exemption notification SI.No.66(a) of 12/2017

The AAR Kerala ruled that an online platform providing coaching/training services to students enrolled in formal schools does not qualify as an ... Educational institution - educational services - exemption under SI. No. 66 of Notification No. 12/2017 CT (Rate) - classification under Heading 9992 - commercial training and coaching servicesEducational institution - education up to higher secondary - commercial training and coaching services - exemption under SI. No. 66 - Heading 9992 - Whether the applicant qualifies as an 'educational institution' under clause (y) of Para 2 of Notification No. 12/2017 CT (Rate) and hence whether its services are exempt under SI. No. 66 of the said notification. - HELD THAT: - The Authority examined the definition of 'educational institution' in clause (y) of Para 2 of Notification No. 12/2017 and the Scheme of Classification under Heading 9992. While appellate decisions recognise a broad concept of 'education' as systematic instruction or training, eligibility for the SI. No. 66 exemption turns on classification as an 'educational institution' within the specific sub-clauses. The applicant, though providing customised coaching and one to one tuition to school enrolled students, is not a formal school and its services are classifiable under Group 99929 (specifically SAC 999293) as commercial training and coaching services rather than core pre primary, primary or secondary school services under Groups 99921-99923. Further, the applicant's training does not form part of a curriculum leading to a qualification recognised by law nor is it an approved vocational education course. Consequently, the applicant does not fall within sub clauses (i), (ii) or (iii) of clause (y) and is therefore outside the scope of the exemption at SI. No. 66. [Paras 7]The applicant is not an 'educational institution' as defined in clause (y) of Para 2 of Notification No. 12/2017 CT (Rate); its services are classifiable as commercial training and coaching and are not exempt under SI. No. 66 of the said notification.Final Conclusion: The Authority rules that M/s Tutor Comp Infotech India Private Limited does not qualify as an educational institution under the cited notification and accordingly its services are not exempt under SI. No. 66 of Notification No. 12/2017 CT (Rate). Issues Involved:1. Whether the transaction between the applicant and individual students on a one-to-one basis falls under SI.No.66(a) of Notification No.12/2017 - Central Tax (Rate).2. Whether providing education up to Higher Secondary School falls under SI.No.66(a) of Notification No.12/2017 - Central Tax (Rate).Issue-wise Detailed Analysis:Issue 1: Transaction Between Applicant and Individual Students on a One-to-One BasisThe applicant, M/s Tutor Comp Info Tech Private Limited, provides educational services via its online platform to individual students, institutions, and government entities. The services include customized study materials, diagnostic assessments, and personalized lesson plans. The applicant contends that these services should be classified under SI.No.66(a) of Notification No.12/2017 - Central Tax (Rate), which exempts services provided by an educational institution to its students, faculty, and staff.The term 'educational institution' is defined under clause (y) of Para 2 of the said notification, which includes institutions providing pre-school education, education up to higher secondary school, education as part of a curriculum for obtaining a qualification recognized by law, and approved vocational education courses. The applicant argues that their services qualify as systematic instruction and training, thus meeting the definition of 'education.'However, upon examination, it was determined that although the applicant provides educational services, these do not qualify as core educational services provided by formal schools. The services are classified under Heading 9992 - Group - 99929 - SAC - 999293 as commercial training and coaching services, which do not fall under the scope of an 'educational institution' as defined in the notification. Therefore, the transaction between the applicant and individual students on a one-to-one basis does not qualify for the exemption under SI.No.66(a) of Notification No.12/2017 - Central Tax (Rate).Issue 2: Providing Education Up to Higher Secondary SchoolThe applicant also claims that providing education up to Higher Secondary School should be exempt under SI.No.66(a) of Notification No.12/2017 - Central Tax (Rate). The notification exempts services provided by educational institutions up to higher secondary school or equivalent.The applicant is not a formal school but provides special training and coaching to students enrolled in formal schools. The training provided does not lead to any qualification recognized by law nor is it part of an approved vocational education course. Consequently, the applicant does not meet the definition of an 'educational institution' under sub-clauses (i), (ii), or (iii) of clause (y) of Para 2 of the notification.As the applicant's services are classified under commercial training and coaching services, they do not qualify for the exemption provided to educational institutions under SI.No.66(a) of Notification No.12/2017 - Central Tax (Rate).Ruling:The applicant is not an educational institution as defined in clause (y) of Para 2 of Notification No.12/2017 CT (Rate) dated 28.06.2017. Therefore, the services provided by the applicant are not exempt under SI.No.66 of the said notification.