Services Provided to Schools

[Srivatsan Krishnamachari]

Dear Experts,

Kindly provide clarity on the below issues

a) If an individual/HUF provides building to school for rent - will this attract Service Tax?

b) If an Institute/organisation providing services to school for improvement of additional skills/courses to the students - will this come under service tax net?.

Thanks to all in advance

Srinvias

[KASTURI SETHI]

Sh.S. Krishnamachari Ji,

 

Reply to both questions is as under:-

1. YES. Exemption withdrawn vide notification 6/14-ST dated dated 11.7.14.

2. Pl. let me know name of institution and name of course.

[Srivatsan Krishnamachari]

Dear Sir,

Their activity is basically, they conduct exams to the various class students to assess the students externally and give the feed back to the school and individuals and suggests for improvement in the subjects. This is a small institute located in Hyderabad

Thanking you

Srinivas

[DR.MARIAPPAN GOVINDARAJAN]

As opined by Shri Seth renting will attract service tax. In my view your second service will also attract service tax provided you have not crossed the threshold exemption.

[KASTURI SETHI]

Sh.Srinvias Ji,

Read your reply to second query. Second service is also taxable. If both services are being provided by one institution, then the value of services provided will be clubbed for the purpose of eligibility of threshold exemption limit of ₹ 10 lakhs. When any service provider crosses the value of taxable service of ₹ 9 lakhs, he is to apply for registration.

[Ganeshan Kalyani]

I do agree with the views submitted by Sri Mariappan Sir and Sri Kasturi Sir.

AI Summary

Taxability of services to schools: rental of premises and student assessment services are taxable and thresholds are aggregated.
Renting a building to a school is taxable after withdrawal of exemption by Notification 6/14 ST dated 11.7.14. Services consisting of external examinations, student assessment and feedback supplied to schools are also taxable. Where both services are supplied by one provider, their values are to be aggregated for the threshold exemption limit and, upon crossing the applicable threshold, the provider must apply for registration.