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 Partnering with Universities for Distance Learning Exempt from Service Tax if Leading to Recognized Qualification. A forum participant inquired about the taxability of educational services, specifically when a service provider partners with universities for distance learning courses, collects fees from students, and conducts exams. The concern was whether these services are exempt from service tax. A respondent clarified that services exempt from service tax must be part of a curriculum leading to a legally recognized qualification. While degree courses by recognized institutions are exempt, training by private institutes not leading to recognized qualifications is not. The service provider's activities, including extra fees for exams, are not subject to service tax.