AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 809
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.... in the alternative and without prejudice to one another. 2. The Authority for Advance Ruling has not considered with a legal perspective the various facts, law and circumstances and even the ruling of the prevailing law on the subject submitted by the appellant. Therefore all the details submitted by the appellant so far, may be read as one of the points of this appeal memorandum. The following are the queries raised by the appellant in the original application and except query number 7, the Authority for Advance Ruling, ruled that the service rendered by the appellant is taxable services and is composite supply. 7th query has been answered as exempted. 2.1 Whether the education programme and training being offered by the appellant is exempted from GST as imparting of education since the appellant is giving lecture classes and notes including printed books published by Govt. recognized institutes, on the basis of the specific syllabus (curriculum) published by the very same institutes formed under Acts of Parliament and also facilitating the students to appear for the examinations conducted by the same institutes. 2.2 Whether the education programme and training being offered b....
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....s to the Scheme of Classification of Services the service code - 999293 includes any training or coaching provided by any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes. 3.3 Question No. 5 - As per Section 15 of the CGST Act, 2017 the entire consideration received by the appellant from the recipient of services is liable to GST. However, if in respect of the amount collected as examination fees/other fees the conditions prescribed in Rule 33 of the CGST Rules, 2017 are satisfied then such amount can be excluded from the value of taxable supply as expenditure incurred by the appellant as a pure-agent of the recipient of services. 3.4 Question No. 6 - The provision of coaching/training provided by the appellant to their students along with hostel facility qualifies as a composite supply as defined in Section 2(30) of the CGST Act, 2017 and the tax liability on the composite supply has to be determined as per provisions of Section 8(a) of the CGST Act, 2017. Therefore the entire supply is ....
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....fication No. 12/2017-Central Tax becomes liable to pay tax. 4.3. With regard to Question No. 5 in the impugned order, the learned Authority for Advance Ruling, ought to have found that the collection of fees to Government university or institute working on the basis of Act passed in the Parliament is only the work of an agent and treating the same as taxable supply is incorrect. The Authority for Advance Ruling under Karnataka Goods and Services Act wherein a similar activity of a similar institution wherein the institution was collecting exam fees and paying it on behalf of the students was considered. In Advance Ruling No. KAR ADRG 116/2019, dated 30-09-2019, it was observed by the Authority under therein that "The activity of collecting exam fee (charged by any university or institution) from students and remitting the same to that particular university or institution without any value addition to It is a service as a pure agent and hence the vague is excluded from the taxable value of the appellant as per Rule 33 of the Central GST Rules." It is the appellant's submission that appellant's activity also is eligible for exclusion by virtue of Rule 33 of Central GST Rules....
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.... follows, which are without prejudice to each other : 5.1. The appellant is following the seme curriculum as specified or recognized by the bodies constituted under of Parliament so providing education in' a format recognized by law. After getting proper guidelines, lectures and other educational support as prescribed by the above institutions, the students appear for examinations conducted by the above Government recognized Institutions. The concerned Government-recognized institutions are conducting the exams by collecting fees for examinations books, etc., as-per their rules of conduct and the appellant is providing the very same service such as classes for the students of the appellant institute to comply with the regulations and all requirements of such institutions working under the Acts of legislature and Parliament. The regular colleges, whether aided or Self-financed affiliated to Universities are also rendering the same service to students and though they are not awarding any degrees or diplomas, they are not subjected to levy of GST on service tax by the Department of GST and so much so, if such colleges are not liable for payment of GST on their service, then there....
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....ecognized by law for taxation purpose. By virtue of this interpretation, the appellant's activities of providing services to qualify for course offered by Indian Government recognized foreign institutions also fall within the purview of courses recognized by law. The order had also re-emphasized that an institution offering degree courses recognized by law was exempted from tax. The decisions of the Hon'ble High Court of Kerala in the Malappuram District Parallel College v. The Union of India [W.P. (C) No. 728 of 2005] and Union of India and Others v. The Kasaragod District Parallel College and Another [2013 (3) KHC 509] are also relevant here wherein levy of Service Tax on services offered by parallel colleges in Kerala was held to be invalid. In the latter case, the Hon'ble Court had held that : "..... 35. Therefore, what is important to consider is that if the institution is one wherein students are being prepared for acquiring qualification, certificate or diploma or degree which is recognized by law in force, then the same will come within the second limb of the exclusion clause under Section 65(27)..." 5.5 The Appellant is preparing students to obtain qualifications and deg....
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.... education. [TMA Pai Foundation v. State of Karnataka (2002) 8 SCC 481 (SC), para 450]. In Soorya Educational Trust. v. ITO 2012 (6) TMI 602 it was held that "Memorandum of Understanding entered by the assessee with Annamalai University and objects of the Trust it is clear that ex facie the objects are nothing but educational and assessee was imparting a type of oral education and students studying in assessee's institutions were being awarded formal Diploma/degree. There is no case for the Revenue that Annamalai University was existing for any commercial purposes. In our opinion, if Annamalai University was an educational institution, then assessee, which was also an educational institution. Hence fees like admission fees, tuition fees, examination fees, computer fees, sports fees, annual subscription of journal fees of schools, universities shall be construed as covered within the ambit of 'education' and shall be covered by negative list - thus no service tax". 5.7. The conduct of degree courses by colleges, universities or institutions which lead to grant of qualifications recognized by law would be covered by the Notification No. 12/2017. Thus the appellant falls within the e....
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....of collecting exam fee (charged by any university or institution) from students and remitting the same to that particular university or institution without any value addition to it is a service as a pure agent and hence the value is excluded from the taxable value of the appellant as per Rule 33 of the Central GST Rules". It is the appellant's submission that appellant's activity also is eligible for exclusion by virtue of Rule 33 of Central GST Rules. Thus by following the above provisions, the service rendered by the appellant would fall under the exempted category. 5.9. The appellant sells text books and notes pertaining to the courses with very s1ight margin to ensure that the students of the appellant get them hassle-free and at reduced prices than that offered by outside sources like book shops or shopping websites. The appellant sells these books at an open market price. Printed books were exempted from GST under the VAT regime and the exemption is continued into GST regime as well. As per the official list of commodities and tax rates published in the official website of Central Goods and Services Tax Department, namely www.cbic-gst.gov.in printed books fall within the....
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....he authority and reiterated the contentions raised in the appeal memorandum. He also submitted additional brief dated 29.02.2021 in their favour for consideration which was also taken on record. Discussion and Findings 9. We have carefully gone through the facts of the case, the Advance Ruling Authority order dated 20/05/2020, the appeal memorandum filed by the appellant and other submissions made by them during the course of personal hearing and other evidences on record. The seven disputed issues to be decided in this appeal proceeding are listed follows :- Issue No. 1, 2 & 3 : Whether all the following Education program and trainings being offered by the appellant are exempted from GST as imparting of education? 1. The appellant is giving lecture classes and notes including printed books published by Govt. recognized institutes, on the basis of the specific syllabus (curriculum) published by the very same institutes formed under Acts of Parliament and also facilitating the students to appear for the examinations conducted by the same institutes. 2. The appellant is giving lecture classes and notes including printed books published by Government-recognized institutions like ....
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....ould be found in the proceedings as the principles of natural justice have been complied with in true spirit of law. The case law of CB Gautam being not relevant to the case is of no help to the appellant. As regards, reasons for arriving at a decision on the issues, we observe that the Ruling has discussed the issues with reference to applicable portion of GST law and arrived at the conclusions accordingly. Moreover, all the points raised by them in their appeal memorandum and additional submissions are being considered once again in this appellate proceedings. Hence, the objections raised by the appellant and the case laws relied upon by them in this regard are found irrelevant. 11. Having dealt with their preliminary objections, we shall now examine each disputed issues in seriatim keeping in view the submissions made by the appellant. The main contention raised by the appellant is that they are providing educational services based on the curriculum published by the recognized institutions and prescribed by law and is, therefore, eligible for exemption from GST as per Sl. No. 66 of the Notification No. 12/2017-CT (Rate), dated 28-06-2017. The appellant further contends that sin....
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....a part of an approved vocational education course as envisaged in para 2(y)(iii) of the said notification. It is not the case of the appellant that they are providing any vocational courses. Hence, they cannot be categorized as 'education institution' within the meaning of sub-clauses (i) and (iii) of para 2(y) of the said notification for the purpose of exemption. The appellant has also not claimed the exemption under these two sub-clause either. 14. Now, it is to be examined whether the services rendered by the appellant would fall within the ambit of para 2(y)(ii) of the said Notification No. 12/2017-CT as detailed above. 14.1 The term "Education" is not defined in the CGST/SGST Act but as per Apex Court's decision in "Loka Shikshana Trust v. CIT". Education is process of training and developing knowledge, skill and character of students by normal schooling. The term "educational institution", under sub-clause (ii) ibid, covers institutions providing services by way of education as part of curriculum for obtaining a qualification recognized by any law for the time being in force. In order to be qualified to get included under this sub-clause educational service should be impar....
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....ody for awarding the certificate for the course. Therefore, the appellant is not qualified to be classified as an 'educational institution' within the meaning assigned and covered vide para 2(y)(ii) of Notification No. 12/2017-CT (rate). 14.4. The appellant has contended that the Advance Ruling authority has erroneously reckoned that the appellant would need to be recognized/approved by the respective bodles, which is actually not required in GST Law. They also added that they have obtained recognition of the ICAI and that courses undertaken by them in ACCA and CMA is also recognized by the Institute of Cost Accountant of India. They impart teaching solely based on curriculam prescribed by the concerned professional bodies, hence they are eligible to exemption as "educational institution" under Notification No. 12/2017-CT (Rate), dated 28/06/2017. They have referred to the definition of 'education' and 'curriculum' given in Cambridge Dictionary, Oxford Dictionary and Dictionary.com and stated that 'education as a part of curriculum...' can be understood as "imparting knowledge (education) through a systematic syllabus in an institution, college or school". According to them, the c....
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.... with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directly in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption...." 16.2. As regards conditions of the notification and fulfillment thereof in true spirit, reliance is placed on the case of M/s. Eagle flask Industries Limited [2004 (09) LCX 0235] wherein Hon'ble Supreme Court has held that the conditions laid down in notification are statutory conditions and same are to be followed/fulfilled in its true letters and spirits and these are not mere formalities and once the conditions of notification granting exemption/refund are not satisfied, the refund cannot be granted to the assessee. 16.3. It is well-settled law that the exemption notification being a liberal piece of legislation, needs to be interpreted strictly within the plain words and language provided therein and there is no scope of intendments. We rely upon the verdict of Hon'ble Supreme Cou....
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....d to interpretation of tax exemption Notification that it is the law that any ambiguity in a taxing statute should ensure to the benefit of the subject/assessee, but ay ambiguity in the exemption clause of exemption notification must be conferred in favour of revenue - and such exemption should be allowed to be availed only to those subject/assesses who demonstrate that a case for exemption squarely falls within the parameters enumerated in the notification and that the claimants satisfy all the conditions precedent for availing exemption. It is further affirmed that every taxing statute and exemption clause should be interpreted strictly. 16.5 In view of above settled position of law in respect of exemption notification, and by applying the settled law of strict interpretation of taxing statute, which are plainly worded, as in the case in hand, the services rendered by the appellant are held to be not a service by way of 'education as a part of curriculum for obtaining a qualification recognized by any law for the time being in force' as envisaged under no 66 of the said notification, for exemption from GST. 17. The other issue for consideration before us is service accounting c....
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....om the value of supply, if all the following conditions are satisfied, namely,- (i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party an authorization by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. Explanation. - For the purpose of this rule the expression "pure agent" means a person who- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold or holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply. (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount receive....
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.... 9992- 999293 - Commercial training and coaching services; being the principal supply and will be liable to GST at the rate applicable for the principal supply. The-appellant has how- ever contended that hostel facility is a standalone facility and not naturally bundled along with educational services; and that hostel facility, being avail- able to any person, is not mandatory and in conjunction with educational ser- vices to fall under the category of composite services; that it is not provided as a package and hence is a divisible contract. The appellant has placed reliance on the Education Guide issued by CBEC and the case law of European Court of Justice in Volker Ludwig [2013] 31 Taxmann.com 287 and UK Upper Tribunal in Hon'ble Society of the Middle Temple vs HMRC [2013] UKUT 0250 etc. They have also claimed exemption on hostel fees under exemption notification No. 12/2017-CT (Rate) dated 28.06.2017 as the declared tariff is less than Rs. 1000 per day, and has retied upon several case laws. 19.3 We observe that the appellant is mainly and principally engaged in imparting training/coaching to their students and thereby providing educational services, which is classifiable ....
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....-2017. Whereas, the appellant has contended that the context of hostel facility would also apply to text books, as the same is sold to any willing consumer and students for a separately agreed consideration. They have sought exemption from GST in terms of Sl. No. 119 of the Notification No. 2/2017-CT (Rate), dated 28-06-2017 and also relied upon case of Sonka Publication India (P) Ltd. 2019 (74) GST 6 (Delhi) to support their arguments. We observe that the supply of text book to students are again at different lower rate than that of outside persons, as is admitted by the appellant in their submissions. Hence, the supply of books or printed material relating to the course opted for them shall have to be treated as part of composite services along with educational services, being the principal service, as is held by us in case of hostel fees charged from the students. Consequently, the supply of books shall also be charged to rate of GST as applicable to educational service under SAC 9992-999293. 21. The various case laws referred to by the appellants are not applicable in the current case because the coaching institute run by the appellant does not qualify to be classified as an e....
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....ion : As per the Scheme of Classification of Services notified as Annexure to Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017, the impugned services provided by the appellant fall under "SAC - 9992-999293 - Commercial training and coaching services". Issue No. 5 : Is there any tax liability under GST laws on the appellant for collected and transferring fees and other fees of the recognized institutes or universities on behalf of students studying at the appellant institute. Decision : Section 15 of the CGST/SGST Act, 2017 specifies that the entire consideration received by the supplier from the recipient of services is liable to GST. However, if the conditions prescribed for "Pure Agent" in Rule 33 of the CGST Rules, 2017 are satisfied in respect of the amount collected as examination fees/other fees by the appellant from the students enrolled with them, then such amount can be excluded from the value of taxable supply. Issue No. 6 : The appellant offers hostel facility to its students at a rate of less than Rs. 200/- per day per person including food and at a monthly rate of maximum Rs. 6000/-. Whether there is any tax liability on such hostel fee? Decision : The....