Commercial training providers not liable for service tax on book sales to students under Notification 12/2003-ST

CESTAT Kolkata held that appellant providing commercial training and coaching services was not liable for service tax on sale of books/study materials to students. The tribunal found that books were sold at printed prices to both enrolled and non-enrolled students, with enrolled students receiving concessional rates. Since appellant was liable for VAT on book sales (though exempted in West Bengal), Notification No.12/2003-S.T. applied, excluding book values from taxable service value. The decision followed precedent from CESTAT New Delhi in similar case, confirming book sale values are not includable in assessable value for service tax computation under commercial training and coaching service category.

---

---

Issues:
1. Whether the sale of books provided for training and coaching of students is liable for Service Tax under the category of 'commercial training and coaching service'Rs.
2. Whether the value of books sold to students should be included in the taxable value of coaching and training services rendered by the AppellantRs.
3. Whether the Appellant is eligible for the benefit of Notification No. 12/2003-S.T. dated 20.06.2003, which excludes the value of books/study materials sold from the taxable valueRs.

Analysis:
Issue 1: The Appellant appealed against the confirmation of Service Tax on the sale of books provided for training and coaching of students. The Department considered the value of books sold by the Appellant as includable in the taxable value for coaching services. The Appellant argued that Service Tax was charged only on tuition fees, not on the price of books/study materials. The Tribunal observed that the Appellant provided coaching services and sold books/study materials to students, with prices indicated. The Tribunal held that the Appellant is liable for VAT on book sales but exempted as VAT was not payable in West Bengal during the period. Therefore, the Appellant is not liable for Service Tax on book sales under 'commercial training and coaching service'.

Issue 2: The Tribunal referred to Notification No. 12/2003-S.T., which exempts the value of goods and materials sold by the service provider from service tax if VAT is paid or payable on those goods. As VAT was payable on book sales, even though exempted in West Bengal, the Tribunal held that the value of books sold is not includable in the assessable value for computing service tax liability. The Tribunal also cited a decision by the Tribunal, New Delhi, in favor of the Appellant regarding the exemption under Notification No. 12/2003-S.T.

Issue 3: The Appellant contended that they were discharging Service Tax on tuition fees and claimed exemption under Notification No. 12/2003-S.T. for the sale value of study materials or books. The Tribunal upheld the Appellant's contention, stating that the demand for Service Tax on book sales is not sustainable. Relying on the decision cited, the Tribunal held that the Appellant is not liable to pay Service Tax on the sale value of books/study materials under 'commercial training and coaching service'. Consequently, the demand confirmed in the impugned order was set aside, and the appeal by the Appellant was allowed with consequential relief, if any, as per law.

---