2025 (11) TMI 1628 - AAR - GST

Educational institution status under para 2(y)(ii), Entry 66(a) of N/N 12/2017-CT exempts HDC, JDC GST

AAR, Kerala held that the applicant qualifies as an 'educational institution' under para 2(y)(ii) of N/N 12/2017-CT (Rate). The courses HDC & BM and JDC ... Eligibility for GST exemption as per N/N. 12/2017-Central Tax (Rate), dated 28.06.2017services provided by the applicant in connection with the courses conducted for students and employees of co-operative societies to achieve eligible qualifications as prescribed under the Kerala Co-operative Law - applicability of clause (b) of sub-section (2) of Section 97 of the CGST Act, 2017 - HELD THAT:- The educational activities of the applicant are squarely covered under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, which exempts “services provided by an educational institution to its students, faculty, and staff.” The applicant, having been recognized as an “educational institution” under clause (ii) of paragraph 2(y) of the said Notification, provides structured educational services through systematic instruction, defined curriculum, qualified faculty, and evaluation leading to the award of diplomas that are qualifications recognized by law. The services rendered by the applicant to students enrolled in the HDC & BM and JDC courses are, therefore, services provided by an educational institution to its students in the course of imparting education. The scope of Entry 66(a) specifically covers such supplies made by an educational institution to its own students in relation to academic instruction and allied educational processes forming part of the curriculum. The fees collected from the students for the said courses are consideration for such exempt services. Hence, the applicant's supply of educational services to students in connection with the HDC & BM and JDC courses is eligible for full exemption from GST under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the applicant qualifies as an 'educational institution' under clause 2(y)(ii) of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. 1.2 Whether services provided by the applicant in conducting HDC & BM and JDC courses are exempt from GST under Serial No. 66(a) of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Whether the applicant qualifies as an 'educational institution' under clause 2(y)(ii) of Notification No. 12/2017-Central Tax (Rate) 2.1 Legal framework 2.1.1 The Court considered the definition of 'educational institution' in clause (y) of paragraph 2 of Notification No. 12/2017-Central Tax (Rate), which covers institutions providing services by way of: (i) pre-school and school education up to higher secondary; (ii) education as part of a curriculum for obtaining a qualification recognized by any law for the time being in force; and (iii) education as part of an approved vocational education course. 2.1.2 The Court relied on Section 89 and Section 91(c) of the Kerala Co-operative Societies Act, 1969, which constitute the applicant and authorize it 'to establish educational institutions and to spread education on co-operative principles and practices.' 2.1.3 Rule 186 of the Kerala Co-operative Societies Rules, 1969 was examined, under which the courses JDC and HDC & BM conducted by the applicant are approved as recognized qualifications for posts in co-operative societies, other than those requiring technical qualifications. 2.1.4 The Court referred to CBIC Circular No. 55/29/2018-GST, Circular No. 117/36/2019-GST, rulings of other Advance Ruling Authorities, and judicial precedents recognizing institutes as 'educational institutions' where the curriculum leads to qualifications recognized by law. 2.2 Interpretation and reasoning 2.2.1 The Court found that the applicant is a statutory body with a specific statutory mandate to provide co-operative education and to establish educational institutions, and that it conducts structured courses, namely JDC and HDC & BM, through training colleges and centres across the State. 2.2.2 It was noted that HDC & BM and JDC are recognized by the State Government, approved by the Public Service Commission and the Co-operative Service Examination Board, and are prescribed as basic/eligibility qualifications for employment in co-operative societies and relevant posts under the Kerala Co-operative Laws. 2.2.3 The Court observed that the applicant independently manages the entire academic process for these courses, including fixing eligibility criteria, admission, syllabus formulation and periodic revision through an expert committee, teaching through its own faculty, evaluation, conduct of examinations under a government-constituted Central Board of Examination, and issuance of certificates. 2.2.4 On these facts, the Court held that the courses are not informal or ancillary training but form a complete 'curriculum' culminating in diplomas which are explicitly recognized as qualifications by statutory rules, and are on par with other law-recognized educational qualifications for specified employments under the Kerala Co-operative Societies Act and Rules. 2.2.5 Applying the principle derived from CBIC circulars and judicial/advance rulings relating to ITIs, DG Shipping-approved courses, aircraft maintenance engineering, and flying training, the Court held that the decisive test is whether the curriculum leads to a qualification recognized by a competent law. Since that test is satisfied, the applicant's courses fall within clause (ii) of paragraph 2(y) of Notification No. 12/2017-Central Tax (Rate). 2.3 Conclusions 2.3.1 The applicant provides 'education as part of a curriculum for obtaining a qualification recognized by any law for the time being in force.' 2.3.2 The applicant, therefore, qualifies as an 'educational institution' under sub-clause (ii) of clause (y) of paragraph 2 of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. Issue 2: Whether services in conducting HDC & BM and JDC courses are exempt under Serial No. 66(a) of Notification No. 12/2017-Central Tax (Rate) 2.4 Legal framework 2.4.1 Serial No. 66 of Notification No. 12/2017-Central Tax (Rate), as amended, exempts, inter alia: 'services provided (a) by an educational institution to its students, faculty and staff' under Heading 9992 or 9963, subject to the conditions stated therein. 2.5 Interpretation and reasoning 2.5.1 Having held that the applicant is an 'educational institution' within paragraph 2(y)(ii) of the Notification, the Court examined whether the services actually supplied fall within Entry 66(a). 2.5.2 The Court found that the applicant provides structured educational services to its own students enrolled in HDC & BM and JDC, comprising classroom instruction, curriculum delivery, academic support, evaluation, and issuance of diplomas, all forming an integral part of the educational process. 2.5.3 It was held that such supplies are 'services provided by an educational institution to its students' in the course of imparting education as part of a recognized curriculum, and that the consideration (fees) collected is for these exempt services. 2.5.4 No limiting condition in Serial No. 66 was found to exclude institutions falling under paragraph 2(y)(ii) from the scope of clause (a). Therefore, Entry 66(a) squarely covers the applicant's educational activities in relation to these diploma courses. 2.6 Conclusions 2.6.1 The educational activities of the applicant in conducting HDC & BM and JDC courses are covered under Entry 66(a) of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. 2.6.2 The services supplied by the applicant to students, being services by an educational institution to its students in respect of a curriculum leading to law-recognized qualifications, are fully exempt from GST. 2.6.3 The applicant is eligible for GST exemption on the supply of services provided in connection with the HDC & BM and JDC educational courses under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017.