TaxTMI 
TaxTMI 
2023 (12) TMI 287
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....sthan-324005 (hereinafter also referred to as 'appellant' or "REL") against the Advance Ruling No. RAJ/AAR/2021-22/35 dated 28.12.2021. The appellant has filed appeal on 27.01.2022 online & also submitted hard copy in this office on 31.01.22. The requisite Fee of CGST Rs. 10000/- and SGST Rs. 10000/- has, been paid vide Challan dated 25.01.2022. 3. The appellant, M/s Resonance Edventures Limited is a company registered under the Companies Act, 1956. They are inter alia engaged in the business of imparting coaching to students aspiring for admission into various engineering and medical colleges in India. BRIEF FACTS OF THE CASE 4.1 The appellant is registered under Goods and Services Tax with Registration Number 08AADCR5581MIZT dated 01.07.2017 under the categories of "Commercial Training or Coaching Centre Services" and "Advertising Agency's Services". 4.2 The appellant have been providing coaching services under the physical/classroom mode but due to Covid environment, they shifted their business model through remote channel partner network. According to the appellant their business model in brief is as under: 1. The appellant provide coaching services to enro....
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....ith appellant without any delay. Deposit of collection towards registration/admission and course fee from enrolled students in the designated bank account. (v) Providing facilities and infrastructure for smooth conduct of courses such as AC class rooms, black/white board, drinking water, furnished Computer lab, staffroom, supporting staff etc. (vi) Offering fee discount as per Resonance policy. (vii) Marketing of courses. (viii) Providing premises/campus as per requirement. (ix) Local advertisements B. Obligations of the appellant : (i) Facilitate/assist in appointing the faculty, academic man power in consultation and approval of the network/channel partner. (ii) Preparing and providing- (a) high quality printed study materials, (b) soft copy of examination papers, (c) soft copy of course planners, and (d) soft copy of annual schedule or any changes in any of the above papers. (iii) To provide 'Student Kit' and all other committed deliverables to all registered students (iv) Communicating in time, any changes in any of study material, student kits, examinat....
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....or 18% in case of IGST). Q.2: If the answer to the aforesaid first question is a supply of service, the applicant would like to know whether such supply of coaching services shall be considered as composite supply under section 2(30) of CGST Act, 2017? If yes, what shall be the principal supply as per section 2(90) of CGST Act, 2017? Ans. In the present case, the supply is a mixed supply of goods as well as services under Section 2(74) of GST Act, 2017 and attracts highest rate of tax g 18% (i.e. 9% CGST+ 9% SGST or 18% in case of IGST). Q.3: Applicant provides coaching services under a new business model through channel / Network Partners as per sample agreements provided, containing obligations of applicant (REL) and such channel / Network partners. According to agreement, the channel / network partner provides the services to the students on behalf of applicant. In such a situation, who shall be considered as supplier of coaching (REL) service and recipient of such service under the agreement? Ans. In the present case, applicant will be supplier of mixed supply to the students and Network partner will be supplier of service to the applicant. T....
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....ry to each other as well as submissions / interpretations made by Jurisdictional Commissioner. This is demonstrated as follows on the nature of services: Case Department view of supply AAR View of supply M/s Symmetric Infrastructure Private Limited (02.09.2021) Mixed Composite M/s Resonance Edventures Limited Composite Mixed 5.4 The appellant submitted that the learned authority in both the cases has ruled contrary to the Department view and the Department has also interpreted it differently in both the cases. The issue on which advance ruling was sought has therefore, suffered in constitutions interpretation and leads to further confusion in the mind of taxpayer / appellant. PERSONAL HEARING 6. Personal hearing in the matter was held on 11.10.2023, Sh. Sanjiv Agarwal CA and Sh. Saurabh Agarwal, CA authorized representatives of the appellant appeared and emphasized that the practice of the appellant is beneficial to Revenue. They reiterated that the AAR has not followed its own ruling in the case of M/s Symmetric Infrastructure Private Limited. They also supplied a write up of seven pages, sample copy of invoices and copies of two agreement made ....
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....Institutes Pvt. Ltd (2022) 61 GSTL 470 and the other one passed by the AAR, Maharashtra in the case of M/s Rahul Ramchandran Inspire Academy (2022)93GSTL90. As such, the issue for consideration before us is whether the supply of services of coaching to students which also includes supply of goods/printed material/test papers, uniform, bags and other goods to students against a lump-sum amount, is "composite supply" or "mixed supply". 7.3 Before examining the nature of supply as 'mixed supply' or 'composite supply', we find it pertinent to go through the relevant provisions of the CGST Act 2017 which define the terms Composite supply and Mixed supply. 7.4 We note that as per Section 2(74) of the CGST Act the term "mixed supply" means two or more individual supplies of goods or services, or any combination thereof made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. (emphasis supplied) Illustration. - A supply of a package consisting of canned foods, sweets chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these ite....
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....site supply, is ancillary. 7.7 Furthermore, we find that the concept of composite supply under GST is not new and is identical to the concept of naturally bundled services prevailing in the existing Service Tax regime. This concept has been explained in the Education Guide issued by CBEC (Now CBIC) in the year 2012 as under : "Bundled Service" means a bundle of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. An example of 'bundled service' would be air transport services provided by airlines wherein an element of transportation of passenger by air is combined with an element of provision of catering service on board. Each service involves different treatment as a manner of determination of value of two services for the purpose of charging service tax is different. The rule is - 'If various elements of a bundles service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character' 7.8 This authority also carefully examined the nature of services offered by the a....
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....a package. (c) The different elements are not available separately. (d) The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected. 7.9 We find that the students pay to M/s REL a lumpsum amount for the coaching which includes, the coaching services, and student kit (printed material, bag, uniform etc) and the same are not separately charged. As far as providing of printed material/study material/forms are concerned, we find that it is an essential and inseparable part of providing coaching. 7.9.1 Secondly. it is a normal practice in the market that all coaching centres/institutes advertise a package for providing coaching services including a student kit which consists of printed material, uniform, bags and other goods. Thus, in the instant case, we find that uniform. bags etc. though can be sold separately. In the case before us, these items contain the logo of the service provider. Thus, on the basis of the business practice being followed in the coaching industry, we are of the view that these are not separable. The main service or principal supply of the appellant is provision of coac....
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....ts 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 coaching/training provided by the appellant to their students along with hostel facility qualifies to be categorized as a composite supply as defined in Section 2(30) of the CGST Act, 2017 As per Section 8(a) of the CGST/SGST Act, 2017, the entire supply is to be treated as falling under "SAC -9992-999293 -Commercial training and coaching services" being the principal supply and will be liable to G5T at the rate applicable for the principal supply. Issue No. 7 : Whether there is any tax liability on the appellant for selling text books to its students? Decision : As held in respect of hostel fees, the sale of text books to the students qualifies to be categorized as a composite supply as defined in Section 2(30) of the CGST Act, 2017, As per Section 8(a) of the CGST/SGST Act, 2017, the entire supply is to be treated as. falling under "SAC - 9992999293 - Commercial training and coaching services" being the principal supply and will be liable to GST at the rate appli....