applicability of service tax for National cadets corps under MOD and educational organization

[puneet chadha]

Dear Sir,

I would like to solicit your leaned advice on the applicability of service tax on my organization. I am commanding officer of NCC ( National Cadets Corps) an organization under the Ministry of defence formed by an act of Parliament. However, it is submitted that though it enrols volunteers from students of schools and colleges, it has a proper curriculum and syllabus to be followed. By the circular of UGC NCC has been introduced as an elective subject and hence those volunteers who have joined NCC have to pass the examinations to achieve their degree or move to next class. My unit also as part of curriculum teaches flying microlite aircraft to the cadets. These aircraft are kept in the hangar at airport maintained by Airport authority of India for which a nominal rent of 10% is paid due to being a governement organization. Initially, commercial rent was charged by the AAI which was disputed and hence a nominal rent was agreed upon due internvention by ministry of civil aviation.However, there is no clarity on service tax . in the bills received service tax has been charged. since my organization is a government department and also an educational institution will it be charged service tax on the hangar rent. Kindly advise.

AI Summary

NCC Officer Questions Service Tax on Hangar Rental; Clarification Given on Educational Exemption Withdrawal and Tax Liability. A commanding officer of the National Cadets Corps (NCC), under the Ministry of Defence, sought advice on the applicability of service tax for renting a hangar from the Airport Authority of India (AAI). The officer argued that the hangar is used for educational purposes, not commercial activities, and questioned the service tax charges. Responses clarified that exemptions for educational institutions were withdrawn, and AAI, as an autonomous body, correctly charges service tax. The discussion highlighted that renting immovable property is considered a business activity, and the service recipient is liable for the tax under the reverse charge mechanism.