Taxability of Educational Services

[Dipak Rajpara]

Respected Experts,

It is mentioned in the notification  no. 25/2012 dated 20.06.2012 Chapter 9 that Educational Services are exempt.

I wish your guidance in a situation where Service Provider has Tie Up with various universities for distance learnig courses and the Service Provider is collecting Fees from students in its own name and then paying some part of it to the university for the addmission. The Service provider is also conducting open book exams at its premises on behalf of the universities.

The Student does  not know how much actual Fees is being paid to the university & the university is also not aware of the fees acutally collected from the student.

My concern is, Whether this type of service is Exempt from Service Tax?

Thanks for the valuable support.

Dipak

[YAGAY andSUN]

Kindly refer the para  4.12.1 of the service tax educational guide in this regard. Only such educational services are in the negative list as are related to delivery of education as ‘a part’ of the curriculum that has been prescribed for obtaining a qualification prescribed by law. It is important to understand that to be in the negative list the service should be delivered as part of curriculum. Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualirfication.

Even if you are charging some extra fees for coducting such exams or course, then, you are not liable to pay the service tax on such activities.

 

AI Summary

Educational services exemption applies when delivery is part of a prescribed curriculum leading to a recognized qualification, affecting tax treatment. Exemption applies only where the service is delivery of education forming part of a prescribed curriculum leading to a legally recognized qualification; colleges, universities and similar institutions conducting such degree courses are covered, whereas private coaching and other training not leading to a recognized qualification are excluded. Ancillary charges for exam conduction or administrative facilitation are treated as part of the exempt educational service when the underlying activity qualifies as covered educational delivery.