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

Service tax on rent of immovable property: educational use does not exempt rent charged by public airport authority.
Rent paid to Airport Authority for hangar use by an educational NCC unit is not covered by the limited educational service exemptions and is taxable; renting immovable property is excluded from the listed exemptions, construction exemptions apply to construction activity only, and where a government or autonomous authority provides services to business entities reverse charge may make the recipient liable, subject to applicable threshold provisions.