tax on following services

[ajay singh]

A Company is carrying vocational training courses like Fitter , Quality Testing, Mobile repairing, Beauty parlor etc. It has two mode of receiving consideration Tuition fee from students or grant from Govt. to be recd based on no. of students doing particular course. Govt grant is recd under Govt Schemes after completion of course. Whether above two nature of receipts are exempt from Service Tax and if yes then under what condition?

[Dilip Darji]

Dear Sir.

The Services provided by you are not liable to exemption under Noti.No.24/2004-ST dt.10/09/2004, as amended, as it appears that your institute is not affiliated to the National Council for Vocational Training.

Regarding valuation, you are required to Service Tax @ 10.3 % on the fees being received by you from the students.

Grant received by you is not liable to Service Tax for the reason that Donation or grant-in-aid is not specifically meant for a person receiving such training or to the specific activity, but is in general meant for charitable cause championed by the registered Foundation (Refer CBEC Circular No.127/9/2010 dt.16/08/2010..  

AI Summary

Service tax on vocational training: tuition fees are taxable while general government grants are treated as non-taxable.
Tuition fees for vocational training are taxable because the institute lacks the affiliation required for exemption and must be included in valuation; government grants received as general donations or grant-in-aid not earmarked for specific trainees or activities are not taxable under the administrative guidance.