Service tax liability on commercial coaching.

[MANASH MUKHERJEE]

A commercial coaching institute short term courses as well courses under DOEACC scheme at O/A/B/C level. My question is whether the fee received against DOEACC scheme is taxable or non taxable.

[Ganeshan Kalyani]

Providing Commercial coaching service is a taxable service liable for service tax. What is DOEACC ?

[Mahir S]

Sir,

I have divided the reply in 04 parts as discussed below.

[Mahir S]

(A) Yes, service tax is applicable on commercial coaching services as explained above. However, exemption from service tax is provided vide section 66D(l) under negative list if services relates to:-

Services by way of –

(i) pre-school education and education up to higher secondary school or equivalent;

(ii) education as a part of a curriculum for obtaining a qualification recognized by law;

(iii) education as a part of an approved vocational education course.

(B) Meanings and Definitions:

Section 65B(11) - "approved vocational education course" means,––

(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961; or

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Employment and Training, Union Ministry of Labour and Employment; or

(iii) a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of India;

(C)The Department of Electronics and Accreditation of Computer Courses (DOEACC) is an autonomous scientific society under the Indian Ministry of Communications and Information Technology. There are five computer courses offered from DOEACC.

(D) In view of above, please confirm if the DOEACC is an approved vocational educational course. If yes, then it is exempted from service tax payment.

Manash ji, my work is over, now your work begins..

[Akash Deep]

Dear Sir,

As Doeac is a certificate course in computer application. the certificates issued under this this course is also recognised under law. hence services are covered under negative list. no service tax.

when a service is covered under negative list of services, it is a non -taxable service and not exempted service. to be an exempted service it has o be a taxable service first. technically. there is a difference between exempted service and non taxable service.

[KASTURI SETHI]

Clause (iii) to Section 65 B (11) stands omitted w.e.f. 10.5.13. The institution providing the computer training/course must be affiliated to National Council for Vocational Training, New Delhi or State Council for Vocational Training in order to be categorized as Negative List under Section 66 D (l), failing which service would fall under the taxable category. The basis of my reply is the detailed information provided by Sh.Mahir S. and Sh.Akash Deep, Sirs in their replies 10.2.16 and 11.2.16 respectively. Thanks to both experts.There is no doubt about the difference between non-taxable service and exempted service.

[Mahir S]

Yes Kasturi Sir ji, perfectly explained.

The pre condition regarding Approved Vocational Education Course is required to be satisfied to fall under the negative list category.

[Ganeshan Kalyani]

Thanks to Sri Mahir ji, Sri Akash ji and Sri Kasturi Sir for your nice reply. It in fact enriched my knowledge. Thanks.

[Vijay kumar]

Please refer to the following provisions of Finance Act, 1994.

"66D(l) services by way of-

(i) pre-school education and education up to higher secondary school or equivalent;

(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

(iii) education as a part of an approved vocational education course;

65B (11) "approved vocational education course" means,--

(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training ²[or State Council for Vocational Training] offering courses in designated trades notified under the Apprentices Act, 1961; or

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Employment and Training, Union Ministry of Labour and Employment; "

Thus, negative list covers the above 3 types of courses and vocational course is defined as above, at present. Apart from this, services provided by an educational institution (defined as below) are exempted under Mega exemption Nofn.25/2012-ST.

[(oa) “educational institution” means an institution providing services specified in clause (l) of section 66D of theFinance Act,1994 (32 of 1994);]

 

Analyzing your case in the above framework, short term commercial coaching / training courses are taxable, no doubt.

Regarding DOEACC (Department of Electronics and Accreditation of Computer Courses), please check whether the qualification / degree awarded at the end of the course is recognized by law for the time being in force or it qualifies to be the vocational course within the definition extracted above. If yes, it is not taxable. Otherwise, even such courses are taxable.

AI Summary

Service tax on commercial coaching: taxable unless course qualifies as approved vocational education or recognised qualification. Commercial coaching services are generally taxable; they are excluded from taxation only if they fall within the education exclusions: a recognised qualification by law or an approved vocational education course. The approved vocational course definition requires institutional affiliation or prescribed approvals, and DOEACC courses must be tested against these criteria (recognition by law or meeting the approved vocational course definition) to determine whether the fees are non taxable.