GST exemption for gurukul-style schooling denied where the institution failed the charity and educational institution definitions.

GST exemption under Entry 1 of Notification No. 9/2017-Integrated Tax (Rate) requires both registration under section 12AA or 12AB of the Income-tax Act and services that are genuinely charitable activities, including advancement of religion, spirituality or yoga; a residential gurukul-style school offering a mixed curriculum of yoga, Sanskrit, arts, music, dance, martial arts, English and mathematics was treated as educational and skill-based instruction, not such charitable activity, so the exemption did not apply. Entry 69 applies only to services supplied by an educational institution within the notification's defined scope; because the institution was not shown to provide pre-school, up to higher secondary, recognised qualification, or approved vocational education, this exemption was also unavailable.

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Issues: (i) Whether the services provided through the residential gurukul-style school qualified as charitable activities by way of advancement of religion, spirituality or yoga so as to be exempt under Entry 1 of Notification No. 9/2017-Integrated Tax (Rate); (ii) Whether the services qualified as exempt educational services under Entry 69 of Notification No. 9/2017-Integrated Tax (Rate).

Issue (i): Whether the services provided through the residential gurukul-style school qualified as charitable activities by way of advancement of religion, spirituality or yoga so as to be exempt under Entry 1 of Notification No. 9/2017-Integrated Tax (Rate).

Analysis: The exemption under Entry 1 applies only where the service provider is registered under section 12AA or 12AB of the Income-tax Act, 1961 and the services are by way of charitable activities. The notification defines charitable activities to include activities relating to advancement of religion, spirituality or yoga. The stated curriculum included yoga, Sanskrit, classical arts, music, dance, martial arts, English and mathematics, but the stated objects and the nature of the institution did not establish that the services were in substance directed to advancement of religion, spirituality or yoga. The residential school activities were treated as educational and skill-based instruction rather than charitable activities of the specified kind.

Conclusion: The exemption under Entry 1 was not available.

Issue (ii): Whether the services qualified as exempt educational services under Entry 69 of Notification No. 9/2017-Integrated Tax (Rate).

Analysis: Entry 69 applies only to services provided by an educational institution, which means an institution providing pre-school education, education up to higher secondary school or equivalent, education as part of a curriculum for obtaining a recognised qualification, or approved vocational education. The institution followed its own curriculum, was not shown to provide pre-school education or education up to higher secondary level, and was not shown to fit within the definition of an educational institution under the notification.

Conclusion: The exemption under Entry 69 was not available.

Final Conclusion: The services rendered through Isha Samskriti were held to be taxable and not eligible for exemption under either of the claimed entries.

Ratio Decidendi: Exemption under the relevant GST notification is confined strictly to services that satisfy the specific definitional conditions of charitable activity or educational institution, and a curriculum-based residential school that does not meet those statutory conditions cannot claim the exemption.

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