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2019 (4) TMI 382

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....ter referred to as 'IIMB'/'Appellant') against the advance Ruling NO. KAR/ADRG 25/2018 Dated: 25th Oct 2018 = 2018 (11) TMI 662 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA. Brief Facts of the case: 1. Indian Institute of Management, Bangalore was registered as a society with the Registrar of Societies, Mysore State and is recognized as a premier institute of higher learning and seat of academic excellence in the field of management. Consequent to the passing of the Indian Institute of Management Act, 2017 which received presidential assent on 31st December 2017 and came into force with effect from 31.01.2018, IIMB is now a body corporate as per Section 4 of the said Act. The object of the Act was to declare certain institutes of management to be institutions of national importance with a view to empower them to attain global standards of excellence in management, management research and allied areas of knowledge. 2. In the light of the enactment of the IIM Act, 2017, IIMB applied for an advance ruling before the Authority for Advance Ruling on 09.05.2018 on the following questions: a) Whether the long duration post graduate diploma/degree granting programs offered by the IIMB, ....

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....e; 4. Aggrieved by the ruling of the AAR, an appeal has been preferred before this Authority on the following grounds: 4.1 IIMB is an institution recognized worldwide as an institution of higher learning and seat of academic excellence in the field of management. IIMB currently offers the following 5 long duration programs which collectively develop entry and middle level management professionals for companies, government and non-governmental organizations. Table 1 Sl.No. Program offered Duration 1 Fellow Program in Management (FPM) is a full time doctoral program and is committed to train individual who will excel in their area of research through publication of high-quality work of international standard. 5 years 2 Post Graduate Program in Management (PGP) is designed to equip the student with skill and capabilities that will enable them to reach responsible global position in management. The PGP revolves around the principle that world class business leaders are not mass produced; they are nurtured and developed in a practical application oriented, user friendly environment. This is a flagship MBA degree equivalent program where students are admitted through CAT. 2 y....

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....B qualify for exemption under Sl.No. 66 of the Notification No. 12/2017 CT(R) since IIMB is recognized as an educational institution as they provide a qualification which is recognized by the IIM Act, 2017. 4.4. A similar question was referred to the Authority for Advance Ruling, West Bengal by IIM Calcutta viz: whether, after the introduction of the IIM Act w.e.f. 31.01.2018, the Applicant should be considered as an 'educational institution'? The AAR, West Bengal held that the Applicant is an 'educational institution' within the meaning of sub-clause (ii) of clause 2(y) of the exemption notification No 12/2017 CT(R) dated 28.062017 in terms of the IIM Act and the Applicant is eligible for benefit of exemption under Entry No 66(a) of the said Notification. 4.5. Placing reliance on the above Advance Ruling, the appellant states that they qualify as an 'educational institution' as defined under clause 2(y) of the Notification No 12/2017 CT (R) and are eligible for exemption under entry No. 66(a) of the Said exemption notification since IIMB is also recognized by the IIM Act and Offers the same courses; that the CGST Act and the relevant Notification has not taken into consideration....

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.... the benefit of its students and faculty members from within India and abroad. These journals are made available to authorized users such as persons affiliated with IIMB as students, faculty or employees, The authorized users may access and use the journals only for scholarly and research purpose; that in view of the above, the procurement of the online journals are eligible for the exemption under Sl.No. 10 of the Notification No 09/2017 (IT) dated 28.06.2017. DISCUSSIONS & FINDINGS: 6. We have gone through the records of the case and taken into consideration the submissions made by the Appellant in their grounds of appeal and at the time of the personal hearing. 7. The two issues for determination before us are: a) Whether the long duration post graduate diploma/degree granting programs offered by the IIMB, other than those programs specifically mentioned in SI.No. 67 of Notification No 12/2017 CT(Rate) dated 28th June 2017, are exempted from GST in the light of the enactment of the IIM Act, 2017? b) Whether supply of online educational journals or periodicals to the IIMB is exempted from reverse charge liability of GST under SINO 66 of Notification No 12/2017 CT(Rate) dat....

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....3 Sl.No. Chapter, Section, Heading Group or Service Code (Tariff) Description of Services Rate (per cent) Condition 66 Heading 9992 Services provided - (a) by an educational institution to its students, faculty and staff; (aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee; (b) to an educational institution, by way of,- (i) transportation of students, faculty and Staff; (it) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; (v) supply of online educational journals or periodicals: Provided that nothing contained in sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. "Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution pr....

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....Executive Certificate Programs are not considered as equivalent to any MBA. Only the diploma level programs are considered as equivalent to an MBA degree. Being Societies, IIMs were not authorized to award degrees (which as per Indian law can be conferred only by Universities and deemed-to-be- universities) and hence, IIMs were awarding diplomas and fellowships in management. These diplomas and fellowships were only equivalent to an MBA or Ph.D. and the equivalence was not universally accepted. Since the diplomas and fellowships given by IIMs were not qualifications recognized by any law in India, they were not considered as an 'educational institution' in terms of the definition at clause 2(y) of Notification No 12/2017 CT(R), However, having due regard to the fact that certain programs of IIMs are akin to university degrees, the GST law has provided for a separate exemption to IIMs who provide the two year Post Graduate Program in Management, Five year integrated program in management and the Fellow Program in Management by virtue of entry Sl.No 67 of the above said Notification. The Executive Development Program is excluded from this exemption since the certificate awarded for t....

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....ara of the Circular is reproduced hereunder: 5. For the period from 31st January, 2018 to 31st December, 2018, two exemptions, i.e. under Sl. No. 66 and under SI. Nov 67 of notification No.12/2017- Central Tax (Rate), dated 28.06.2017 are available to the IIMs. The legal position in such situation has been clarified by Hon'ble Supreme Court in many cases that if there are two or more exemption notifications available to an assessee, the assessee can claim the one that is more beneficial to him. Therefore, from 31st January, 2018 to 31st December, 2018, IIMs can avail exemption either under SI. No 66 or SI. No. 67 of the said notification for the eligible programmes. In this regard following case laws may be referred- I. H.C.L Limited vs Collector of Customs [2001 (130) ELT 405 (SC)]  = 2001 (3) TMI 971 - SUPREME COURT OF INDIA ii. Collector of Central Excise, Baroda vs Indian Petro Chemicals [1997 (92) ELT 13 (SC)] = 1996 (12) TMI 66 - SUPREME COURT OF INDIA iii Share Medical Care vs Union of India reported at 2007 (209) ELT 321 = 2007 (2) TMI 2 - SUPREME COURT OF INDIA iv. CCE vs Maruthi Foam (P) Ltd [1996 (85) RLT 157 (Tri.) = 1995 (9) TMI 194 - CEGAT, NEW DELHI as....

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.... 1 2 3 4 5 10 Chapter 99 Services received from a provider of service located in a non- taxable territory by - (a) -------------; (b) --------------; or (ba) way of supply of online educational journals or periodicals to an educational institution other than an institution providing services by way of- (i) pre-school education and education up to higher secondary school or equivalent; or (ii) education as a part of an approved vocational education course; Nil Nil The Appellant in their additional submissions have stated that they subscribe to online journals and periodicals for its students and faculty, both from within India and abroad. The exemption as per the above Notification is applicable to an educational institution (other than pre-school educational institutions, institutions offering education up to higher secondary school or equivalent and vocational educational institutions), when they receive online journals and periodicals from a supplier located in a non-taxable territory. We have already concluded that IIMB is an educational institution as defined in clause 2(y) of the Notification No 12/2017 CT (R) dated 28.06.2017 and it is an educational instit....