Query on RCM for the affiliation fee payable to foregin educational institutions

[Ravi Venkatraman]

Dear Experts,

I work for an educational group, based out of Bangalore, which has in its group, 1 International School also, for which affiliation fees are to be paid to Cambridge UK and also one more educational affiliation organisation in Singapore. We have heard that on such affiliation fees paid to those foreign institutes, we are to remit GST to government, under RCM. since the educational services are exempt from GST, we have not registered under GST, is the information that we have to remit RCM on affiliation fees is correct and if so, do we need to register under GST act, only to remit the RCM and keep filing NIL returns, during the rest of the months, when no such affiliation fees are being paid. how shall we proceed.

Request your opinion.

thanks !

AI Summary

Reverse Charge Mechanism may apply to foreign affiliation fees, requiring GST registration and remittance under RCM.
The reverse charge mechanism may apply to affiliation fees paid to foreign education bodies because such fees are consideration for services from a person in a non taxable territory. Exemption for educational services appears at Sl No. 66 of Notification No. 12/2017 CT (Rate), but its application to cross border affiliations is unsettled. A person liable under reverse charge must obtain GST registration; practitioners recommend seeking governmental clarification, registering and paying under protest and applying for refund, or paying to avoid litigation.