2024 (1) TMI 1350 - AAR - GST

Foreign university admission services don't qualify for GST exemption under N/N. 12/2017 as courses lack Indian legal recognition.

The AAR Kerala ruled that services related to admission to foreign universities do not qualify for GST exemption under N/N. 12/2017. The authority held ... Exemption from GST - services in relation to admission to foreign universities - Applicability of N/N. 12/2017 amended vide notification 2/2018 - whether the courses provided by the applicant's foreign clients are part of a curriculum for obtaining a qualification recognised by any law for the time being in force? - HELD THAT:- As the Australian Universities are approved by Association of Indian Universities the courses offered by them are also acceptable by law for the time being in force in India. In this regard it is observed that the claim of the applicant that Association of Indian Universities have recognised the courses conducted by foreign universities to which the applicant is providing admission related services is factually incorrect since the Association of Indian Universities do not recognise the courses conducted by the foreign universities. They only Issue Equivalence Certificate for the courses of foreign University to individual students. As per the AIU website (https://aiu.ac.in/evaluation.php) “AIU is vested with the power of according academic equivalence to the degrees obtained from the accredited foreign Boards/universities). Issuance of equivalence Certificate does not amount to recognising the course. Further, the Association of Indian Universities is not a statutory body. It is only a society constituted under Indian Societies Act, 1860. The same is the case with Association of Common Wealth Universities. The ratio of the judgment in ANKITA THAKUR AND ORS. VERSUS THE H.P. STAFF SELECTION AND ORS. [2023 (11) TMI 1304 - SUPREME COURT] is squarely applicable in the instant case and recognition for a course is based on an act of the Central or State Government. Issuance of equivalence certificate cannot be considered as recognition given to the course. In view of the ruling by the apex court, the precedents cited by the applicant, being that of lower fora are not applicable. Issues Involved:1. Whether the services in relation to admission to foreign universities are exempt under notification No: 12/2017 amended via notification 2/2018.2. Whether the courses of Universities, which are members of the Association of Indian Universities and Association of Commonwealth Universities, are considered as recognized by law in India.Detailed Analysis:Issue 1: Exemption of Services Related to Admission to Foreign UniversitiesThe applicant sought clarification on whether the services provided in relation to admission to foreign universities are exempt under notification No: 12/2017, as amended by notification 2/2018. The applicant argued that these services should be exempt because the universities are recognized by the Association of Indian Universities (AIU), and the services relate to obtaining qualifications recognized by law in India. The applicant cited precedents and interpretations suggesting that degrees recognized by AIU should be considered as recognized by law.Upon examination, the judgment noted that the exemption under notification No: 12/2017 pertains to services provided to educational institutions for obtaining qualifications recognized by any law for the time being in force. The term 'educational institution' is defined to include institutions providing education as part of a curriculum for obtaining a qualification recognized by law. However, the judgment emphasized that the courses conducted by foreign universities are not recognized under any Indian Central or State Government Act, and thus do not qualify for the exemption under the specified notification. The ruling clarified that the services related to admission to foreign universities do not fall under the exemption provided by notification No: 12/2017.Issue 2: Recognition of Courses by AIU and ACUThe second issue was whether the courses offered by universities, which are members of the Association of Indian Universities and the Association of Commonwealth Universities, are considered recognized by law in India. The applicant argued that the recognition by AIU should be sufficient for the courses to be considered as recognized by law.The judgment clarified that the AIU does not recognize courses but only issues equivalence certificates for degrees obtained from foreign universities. The issuance of an equivalence certificate does not equate to recognition by law. Furthermore, the Association of Indian Universities is not a statutory body; it is a society under the Indian Societies Act, 1860. Similarly, the Association of Commonwealth Universities does not provide recognition as claimed. The judgment referenced a Supreme Court decision, emphasizing that recognition must be based on statutory procedures. Therefore, the courses of universities that are members of AIU and ACU are not considered recognized by law in India.Rulings Issued:1. The services in relation to admission to foreign universities provided by the applicant are not exempt under notification No: 12/2017 Central Tax (Rate) amended via notification 2/2018-Central Tax (Rate).2. The courses of universities that are members of the Association of Indian Universities and the Association of Commonwealth Universities are not considered recognized by law in India.