TaxTMI 
TaxTMI 
2019 (11) TMI 1258
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....reiterate the same. The Member (Judicial) has taken a view that prior to 01.07.2012, the services rendered by the assessee is not taxable under "Business Support Services"whereas Member (Technical) has taken the view that the activities carried out by the assessee would fall within the definition of "Business Support Services". Before going into the duty of resolving the difference between the two Members, it requires to be mentioned that both Members agree that the activity/services rendered by the assessee post 01.07.2012 does not attract levy of service tax since education is covered by the mega notification No 25/2012-ST dated 20.06.2012. Thus there is consensus that the very same services rendered by the assessee to the service recipient post 01.07.2012 is not taxable. Though Member (Judicial) took the same view for the period prior to 01.07.2012 observing that 'education' will not fall under the phrase "business or commerce" as contained in the definition of'Business Support Services', Member (Technical) has taken a contrary view holding that the education services rendered by service recipients are in the nature of 'business' and therefore the services rendered by assessee t....
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....e also availing the status of charitable trust under the provisions of income tax law. The trust deed would show that these educational trusts are public charitable trusts with the objective to shape, aid and maintain educational institutions for primary pre-primary, secondary, intermediate and degree students. It is expressly declared in trust deed that no part of income or the corpus of the trust fund shall be liable for any objective or purposes other than those of the trust set out. Thus the fund of the trust has to be utilised for the objective of the trust only and under no circumstances the fund can be alienated. These Trusts which are recipients of service from the assessee fulfill the conditions of charitable trusts under Section 11 of the Income Tax Act 1961. Therefore, services rendered by the assessee to these educational trusts cannot be treated as services in relation to 'business' or 'commerce' and accordingly these services are outside the scope of definition of 'business support services'. He pointed out that Member (Technical) has failed to appreciate that only activities covered under "inclusive" portion of the definition of BSS will be services in the nature of ....
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....4. Provision and maintenance of Mess Facilities 5. Recruitment and /or employment of teaching and nonteaching staff and administering their employment related matters including teacher training; 6. Provision of content, curriculum and related services with regard to delivery of education services to the students etc." Based on the above agreement VEMPL has rendered following services to SKCMET: 1. Accounting services 2. Administrative services 3. Fleet management services 4. Pay roll services 5. Teaching assistance services etc. Based on the above agreement, VEMPL has rendered the services to SKCMET and categorised the services into various heads of services for payment of service tax. Further, they paid service tax only on certain services such as ERP services, IT management services, marketing services, and campaigning services. They did not discharge service tax on accounting services, administrative services, fleet management services payroll services and teaching assistance services etc. 8. Similarly, as per the agreement, entered between the assessee KEMPL and SCET and NET, assessee KEMPL was required to provide similar services to SCET and NET at t....
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.... the earlier proceedings the issue of exigibility to service tax under 'Commercial Coaching and Training Services' for the educational institutions was held to be valid. However, the demand was set aside on the extended period. The appellant therein/SCET has accepted the decision but the appeal filed by the department against the said order on the issue of limitation is still pending. Therefore it has to be held that services rendered by the educational institutions are in the nature of 'commercial coaching and training services'. The entire operations of the service recipients having been conducted in the nature of a business, the services rendered by the appellants herein are 'business support services'. The scale of fees charged by the educational institutions/trusts and the enormity of the operations have been rightly considered by the Member (Technical) to hold that the activity of the service recipients is business. That Member (Technical) has come to the conclusion that recipients of service of assessee are running business and therefore the services rendered by assessee herein would fall within the category of 'business support services'. 10. Heard both sides. 11. The p....
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....y educational institutions or hospitals, etc., was clarified by Board to be not subject to levy of service tax as these buildings were not used for commercial or industrial purposes. The clarification issued by Board vide Circular No. 80/10/2004-ST dated 17.9.2004 clarifying the construction services falling under CICS and WCS reads as under:- "13.2 The leviability of service tax would depend primarily upon whether the building or civil structure is "used, or to be used" for commerce or industry. The information about this has to be gathered from the approved plan of the building or civil construction. Such constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable, being non-commercial in nature. Generally, government buildings or civil constructions are used for residential, office purposes or for providing civic amenities. Thus, normally government constructions would not be taxable. However, if such constructions are for commercial purposes like local government bodies getting shops constructed for letting ....
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.... entail additional costs which is surely not reimbursed or subsidized by the Government. If the ultimate service delivered is granting of a certificate or degree recognized by law, they would still enjoy the exemption available to educational institutions. Notification 14/2004 or the Mega notification 25/2012 does not refer to quantum of fees collected for availing the exemption. Legislature has consciously left out such conditionality of fees and has emphasized on the course being recognized by law. 20. In Para 3 to 6, brother Member (Technical) has analyzed the issue of levy of service tax for the period prior to 01.07.2012 and observed that the service recipient are rendering services on an industrial scale and the revenue running into thousands of crores of rupees is not a charity and therefore service recipients are running 'business'. I am not able to agree with this view for the reason that profits made or turnover cannot be a yardstick for deciding the classification of services. For a particular activity to be subject to levy of service tax, it has to fall within the four corners of the definition. When admittedly these Trusts are rendering education services and the cou....