TaxTMI 
TaxTMI 
2024 (5) TMI 177
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....at it had paid the tax under a mistaken understanding of the law. 2. The petitioner also impugns a Circular No. 151/07/2021-GST dated 17.06.2021 (hereafter the impugned circular), inter alia, clarifying that the Central and State Educational Boards, such as the petitioner, are educational institutions insofar as they provide services for conduct of examination, including any entrance examination, to the students. Accordingly, such services would be charged at NIL rate in terms of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 (hereafter the 2017 Notification) issued by the Government of India under Section 11 of the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act). However, the services rendered by such State or Central Boards, such as providing accreditation to an institution or to a professional [accreditation fee such as fee for Foreign Medical Graduate Examination (FMGE) screening test] would be chargeable to GST at the rate of 18%. 3. It is the petitioner's case that the 2017 Notification as amended by the subsequent notifications, does not admit the clarification provided by the impugned circular. According to the petitioner, the impugne....
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.... all dental educational institutions at both undergraduate and post graduate level through such Designated Authority, Section 10D was inserted in DA Act by the Dentists (Amendment) Act, 2016 dated 24.05.2016. 8. The Ministry of Health and Family Welfare, by a letter dated 12.05.2016, appointed the petitioner as the Designated Authority to conduct NEET examinations for the Financial Year 2017-18. By Notification No. MCI-18(1)/2018-Med./100818 dated 05.04.2018, the petitioner was authorized as the Designated Authority to conduct entrance examinations - National Eligibility cum Entrance Test for Post-Graduate courses (hereafter NEET-PG) and National Eligibility cum Entrance Test for Super Specialty courses (hereafter NEET-SS) - for admission into all medical educational institutions. 9. The Medical Council of India and the Dental Council of India, in terms of the relevant provisions of the IMC Act read with Screening Test Regulations, 2002 and DA Act read with Dental Council of India Screening Test Regulations, 2009, authorized the petitioner to conduct various screening tests. The petitioner also conducts the tests as mandated by the Ministry of Health & Family Welfare. 10. ....
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....application seeking refund of taxes paid on the following services: "(i) conduct of NEET examinations; (ii) examination services provided for DNB and FNB courses (including thesis fee, caution money, training charges and other miscellaneous charges); (iii) DNB course fee; and an amount collected under head 'recruitment fee'. According to the respondents, the petitioner was not entitled to refund of GST for any of the aforesaid services prior to 17.06.2021. 15. Mr. Gupta, learned counsel appearing for the petitioner submits that the petitioner had claimed refund of the GST paid from its own sources in respect of services for conducting the NEET examination, conducting examination/course of DNB and FNB including course fee. And, the said applications were wrongly rejected. REASONS AND CONCLUSION 16. At the outset, it would be pertinent to refer to the relevant provisions of the 2017 Notification. In terms of the entry at Serial No. 66(a) of the 2017 Notification, the services provided by an educational institution to its student, faculty and staff is chargeable to Nil rate of duty. Paragraph 2(y) of the 2017 Notification defines the expression 'edu....
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....ged by educational institutions and entrance fee charged for appearing in entrance examinations for getting admission into educational institutions. With a view to promote education, achieve higher gross enrolment ratio and enhance and upgrade education and skill levels of the students GST exemption may be provided for conduct of entrance examination. 1. Services provided by an educational institution to its students are exempt [Notification No. 12/2017- Central Tax (Rate) S. No. 66(a)]. Educational institution has been defined to mean an institution providing services by way of - Preschool and school education upto higher secondary school or equivalent; Education as part of curriculum for obtaining a qualification recognized by any law; Education as part of an approved vocational education course. The admission fee charged by the educational institutions as referred above from its students is exempt from GST. However, the entrance fee charged for appearing in competitive entrance examinations for admission to educational institution is leviable to GST. This anomaly/ discrepancy exist as no specific exemption has been provided to the services pro....
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.... 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; (ii) 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 if 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 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 educatio....
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....ions responsible for administration of education in India. These boards are engaged for educational purposes, conduct of board examination, preparation of curriculum, prepare courses of studies, text books, teaching materials etc., issuance of certificates of the examinations conducted by the Board and equivalence certificate to the examinations of other State Boards, training of teachers, annual survey of school education and many more. All of these works are incidental to education and directly related to promotion of education. The services provided by these boards by way of conduct of examination would entail certain services which they provide themselves or are outsourced to private entities. These services would include the services in the nature of Barcode printing and scanning, OMR scanning, printing of textbooks, printing of question papers and answer sheets, OMR sheets etc. Further definition at clause 2 (zfa) of notification No 12/2017-CT (R), defines "Government Entity to mean an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Gover....
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....ces to and by Educational Boards to students for conduct of examination): The Advisor (Financial Resources), Punjab suggested that the recommendation of the Fitment Committee that services provided by Educational Boards may be exempted but not the services provided by the Boards should be implemented through a clarification instead of issuing a notification, as otherwise field formations may issue demand notices for the past period. The Joint Secretary (TRU-II), CBIC suggested that an explanation could be added to the existing notification 14/2018-Central Tax (Rate) to clarify this issue. The Council agreed to this proposal." 22. Pursuant to the recommendations of the GST Council, the Central Government issued a notification being Notification No. 14 of 2018-Central Tax dated 26.07.2018 (hereafter the 2018 Notification II) whereby an explanation was added by inserting Clause (iv) under Paragraph 3 for expanding the definition of educational institutions to include Central and State Education Boards for the purposes of conducting examination. Clause (iv) as introduced in Paragraph 3 by the 2018 Notification II reads as under: "3. Explanation.- for the purposes of this no....
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....uct of examination for the students including conduct of entrance examination for admission to educational institutions is chargeable to GST at Nil rate under Serial No. 66(aa) of the 2017 Notification. Second, it clarifies that the GST at rate of 18% is chargeable to other services provided by the Boards, "namely of providing accreditation to institutions or to a professional (accreditation fee or registration fee such as fee for FMGE screening test) so as to authorize them to provide the respective services". 26. It is apparent that the impugned circular is not exhaustive regarding the levy of GST on all kinds of services rendered by the Boards. It is clear that the impugned circular cannot be read to mean that all services provided by Central or State Boards are chargeable to tax except services by way of conduct of examination. Sub-paragraph (iii) of Paragraph 4 of the impugned circular is unambiguous and does not provide that 18% GST would be chargeable for all services other than conduct of examination, that may be provided by Central or State Boards. It merely specifies that if GST would be chargeable at such rate in respect of services of providing accreditation to insti....
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....ner is an educational institution within the meaning of Paragraph 2(y) of the 2017 Notification, the fee charged for conducting screening test and accreditation fee charged from medical institutions would clearly not fall within the scope of services provided to students, faculty and staff. 31. The petitioner is the Prescribed Authority in terms of Section 13(4A) and 33(ma) of the IMC Act read with Regulation 2(e) and 5 of the Screening Test Regulations, 2002 issued by the MCI (Medical Council of India) for conducting screening test of Indian citizens, who have been awarded primary medical qualifications from institutions outside India. All such persons, who desire to secure professional or permanent registration with the Medical Council of India or the State Medical Council on or after 15.03.2022, are required to qualify the screening test before a foreign medical qualification is recognized as a medical qualification in India. It is apparent that the screening test is only for the purposes of recognition of qualifications awarded overseas for the purposes of ensuring that the candidate meets the standards as required. Similarly, the petitioner is also the Prescribed Authority ....
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....e to be rejected. 36. Having stated the above, it is also necessary for us to reject the contention advanced by Mr. Aggarwal on behalf of Delhi GST Authorities to the effect that the petitioner is entitled to exemption from GST only in respect of (i) services rendered by way of conduct of examination for the students and no other services, by virtue of the impugned circular and (ii) that such exemption is available only with effect from the date of the impugned circular. 37. Paragraphs 3.1, 3.2 and 3.3 of the impugned circular notes the relevant provisions of the entries of the 2017 Notification, the definition of the expression 'educational institution' as defined at Paragraph 2(y) of the 2017 Notification, and in Clause (iv) of Paragraph 3 of the 2017 Notification. The opening words of Paragraph 4 of the impugned circular indicates that the GST Council has recommended issuance of clarification "taking into account" the aforementioned provisions. Thus, the contention that the impugned circular sought to introduce a substantive amendment to the 2017 Notification or materially altered the scope of any of its relevant entries, militates against the plain language of the impugne....
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....oth from the payment of taxes. However, the said exemption can be granted only by a notification. In terms of Sub-section (2) of Section 11 of the CGST Act, the Government may by a special order exempt from payment of tax on any goods or services or both. However, the said order can be passed only if the Government is satisfied that it is necessary to do so in public interest and under circumstances of exceptional nature, which are required to be stated in the order granting such exemption. Clearly, the impugned circular has not been issued either under Sub-section (1) or Sub-section (2) of Section 11 of the CGST Act. 40. Sub-section (3) of Section 11 of the CGST Act empowers the Government to insert an explanation in any notification issued under Sub-section (1) of Section 11 of the CGST Act or in an order issued under Sub-section (2) of Section 11 of the CGST Act to clarify the scope or applicability of any such notification or order. However, the said explanation is required to be issued within one year of the notification or the order as the case may be. Further, the said explanation is also required to be inserted by a notification. It is apparent that the impugned circular....
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....onal Medical Commission Act, 2019). For the purpose of granting such qualifications, the petitioner conducts examinations and in some cases also considers the score of candidates in NEET examination. Based on the results, the petitioner conducts counselling sessions and allocates seats in accredited institutions. The petitioner specifies the curriculum for the said qualification. The students are required to undertake practical trainings with accredited medical institutions for a specified term. During the said period, the students are required to submit their thesis and have to appear for minimum prescribed number of Formative Assessment Tests (FAT) for securing the eligibility to appear for the final examination. The final examination is conducted at two stages - theory and practical. The petitioner conducts the following examinations for granting the qualifications mentioned hereafter: (i) Fellowship Entrance Exam Test (FEET) (ii) DNB-PDCET Exam (iii) Formative Assessment Test (FAT) (iv) DNB and FNB Final Examination (Theory & Practical) (v) Fellowship Exit Exam (FEE) 43.5 The petitioner also provides other services in respect of s....
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....cted in respect of the conduct of NEET examination by virtue of the 2017 Notification. Thus, no tax is payable for holding Postgraduate NEET - Super speciality and NEET Master of Dental Surgery (MDS). 46. The only dispute relates from the date from which the petitioner is entitled to such exemption. Whereas, the petitioner claims that it is an educational institution and therefore, payment of GST on such services is exempt under the 2017 Notification from the date that it was issued. The learned counsel appearing for respondent no. 5 disputes the same. According to respondent no. 5, services provided for holding NEET examinations are exempt of GST from the date of issuance of the impugned circular. 47. Mr. Aggarwal, learned counsel appearing for respondent no. 5 contended that a taxing statute must be construed strictly and any ambiguity in a provision relating to exemption from payment of tax must necessarily be resolved in favour of the taxing authority. He referred to the decision of the Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company & Ors.: (2018) 9 SCC 1 in support of his contention. He submitted that the petitioner does not qualify ....
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.... Clause (aa) in Serial No. 66 of the 2017 Notification expressly exempting the services by an educational institution by way of conduct of entrance examination against consideration in form of entrance fee. NEET examinations are in effect an entrance examination for the admission of students to various medical institutions. The same is squarely covered by the entry of Serial No. 66(aa) of the 2017 Notification. 50. The question whether the petitioner is an educational institution for the purposes of Clause (aa) of Serial No. 66 of 2017 Notification was expressly clarified by introduction of Clause (iv) in Paragraph 3 of the 2017 Notification. The said explanation clarified that the Central and the State Educational Boards would be treated as educational institutions for the limited purposes of providing services by way of conduct of examination to the students. The opening words of Paragraph 3(iv) of the 2017 Notification are "for removal of doubts". The said Explanation is clearly clarificatory. It is also important to note that the said clarification was introduced as an Explanation in the 2017 Notification pursuant to the suggestion made by the Advisor (Financial Resources), ....
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....alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only." 53. Thus, the contention that the introduction of Clause (iv) in Paragraph 3 of the 2017 Notification brought about a substantive amendment for granting exemption to State and Central Boards in respect of examinations, which prior to the said date was not available, therefore, the same must be held to be applicable prospectively, is liable to be rejected as the very purpose of introducing Clause (iv) in Paragraph 3 of the 2017 Notification was to address an anomaly, which was recommended to be addressed by the Fitment Committee. The GST Council had accepted the same. The manner in which the anomaly was addressed by the 2018 Notification II clearly indicates that the legislative intent was to include the Central and the State Board as educational institutions for the purposes of holding examination, retrospectively. 54. The GST Council had, on a representation, accepted that....
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....erefore, all examination boards except a few were Government entities. Any grant received by educational boards for providing services to government or any other person was also exempt. 56. It was noted that the boards collect admission fee directly from the students sitting in examination and therefore, such burden of GST would fall on the students. Accordingly, it was decided to extend the benefit of exemption from GST in respect of the said services. 57. It is important to note that Clause (iv) was added to the Paragraph 3 in the 2017 Notification, to address an anomaly and the choice of the language in which Paragraph 3(iv) of the 2017 Notification is couched, clearly indicates that the same was introduced to clarify the scope and applicability of the entries at Serial Nos. 66(a) and 66(aa) of the 2017 Notification. 58. It is also relevant to refer to Section 11(3) of the CGST Act. The said provision enables the Central Government to clarify the scope and/or applicability of any exemption notification issued under Sub-section (1) of Section 11 of the CGST Act. The 2017 Notification was issued in exercise of powers under Section 11(1) of the CGST Act. The power under Su....
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....asonably interpret the provision unless the amendment is read. 60. Undisputedly, the question whether a provision is clarificatory or declaratory would not be dispositive of the question whether the same is applicable retrospectively. However, the fact that the language of the statute clearly reflects that it is for removal of doubts and to clarify doubts is a relevant indicator to determine whether the provision in fact intended to clarify and not intended to bring a prospective change. It is also relevant to determine whether the pre-amended law would admit such a clarification. 61. In the aforesaid context, it is relevant to note that in the present case, there is no change in the main exemption provision. Entries at Serial Nos. 66(a) and 66(aa) of the 2017 Notification have not been amended. Paragraph 3(iv) to the 2017 Notification merely seeks to clarify the scope and applicability of the relevant entries as noted above. 62. As noted above, the CGST Act empowers the Central Government to issue a clarification by insertion of an explanation albeit not later than one year from the date of the exemption notification. This also clearly indicates the legislative intent to ....
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....cruitment and who were placed in the selection grade before 29th March, 2001 with four plus two increments". The said decision would have little application in a case where the legislative intent is to clarify the scope and applicability of an exemption notification to include a tax entity, which may not be extended the said benefit. Further, the Supreme Court in the said case referred to the Union of India & Ors. v. Martin Lottery Agencies Ltd.: (2009) 12 SCC 209 and Virtual Soft Systems Ltd. v. Commissioner of Income Tax, Delhi: (2007) 9 SCC 665. These decisions relate to tax laws and the controversy involved retrospective application of provisions that added to the burden of the tax payer. 65. It is relevant to refer to the following observations of the Supreme Court in Commissioner of Income Tax (Central)-1, New Delhi v. Vatika Township Private Limited.: (2015) 1 SCC 1: "28. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities.....
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....ffect. This exactly is the justification to treat procedural provisions as retrospective. In Govt. of India v. Indian Tobacco Assn. [(2005) 7 SCC 396], the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in Vijay v. State of Maharashtra [(2006) 6 SCC 289]. It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are (sic not) confronted with any such situation here. 31. In such cases, retrospectivity is attached to benefit the persons in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectivity. In the instant case, the proviso added to Section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, th....
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....lable in respect of certain services provided to educational institutions. Thus, even if we accept that a clarificatory explanation cannot be applied retrospectively unless there is some ambiguity in the pre-amended provision. The said test is satisfied in this case as well. 68. Now we may proceed to examine whether the service of holding NEET examination is exempt from payment of GST under the 2017 Notification. It is material to note that NEET examination is in the nature of an entrance examination to various medical institutions. Further, the said services are not rendered to students of NEET but to various aspirants wishing to pursue their studies in other institutions. To that extent, there may be a slight difference in the examinations conducted by the Central or State Boards which are in respect of students enrolled with the said Boards and the NEET examinations. The service of holding an examination for aspirants to medical colleges, to provide a standard basis for entrance in medical institutions, the same would not fall within the ambit of Serial No. 66(a) of the 2017 Notification, as the same covers services provided by an educational institution to its students, facu....
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....ces by education in the negative list. Clause (l) of Section 66D of the Finance Act reads as under: "66D. Negative list of services.-The negative list shall comprise of the following services, namely:- (a) to (k)... (l) services by way of- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course." 73. In terms of Entry No. 9 of the Mega Exemption Notification no. 25/2012-ST dated 20.06.2012, services provided to or by an educational institution in respect of education, inter alia, by way of auxiliary education services were exempted from the levy of service tax. 74. Auxiliary education services were defined as under: "'auxiliary educational services' means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge-enhancement activity, whether for students or the faculty, or other services which educational institutions ordinarily canny ....
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....der meaning which would take within its sweep, all matters relating to imparting and controlling education. Examination is an essential component of education as it is one of the major means to assess and evaluate the candidate's skills and knowledge, be it a school test, university examination, professional entrance examination or any other examination. As held by the Supreme Court, the examination is considered as a common tool around which the entire education system revolves. 13.22. Thus, education would mean the entire process of learning, including examination and grant certificate or degree or diploma, as the case may be and would not be limited to the actual imparting of education in schools, colleges or institutions only. Unless the School Boards hold examinations, the education of school students would not be complete, so is the case with college students, whose education would be complete only when the university conducts examinations and awards degrees or diplomas. It is the school boards which issue the Secondary and Higher Secondary School Certificates after holding examinations and the university which confers degrees/diplomas, etc., after holding examin....
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....s Tax Act, 2017, wherein it has been clarified that the Central and State Educational Boards shall be treated as educational institutions for the limited purpose of providing services by way of conduct of examination to the students. 14. Once the Boards/University to whom services have been provided by the petitioners, are held to be educational institutions, the very substratum of the impugned show-cause notices is lost inasmuch as the show-cause notices are premised on the allegation that the service recipients, namely, the Boards/University referred to hereinabove are not educational institutions and, therefore, the services rendered by them do not fall within the negative list of services as provided under section 66D(1) of the Finance Act, 1994 and that the Board/University are not "educational institutions" as defined under clause (oa) of entry No. 2 of the mega exemption Notification No. 25/2012-ST : MANU/DSTX/0065/2012, dated June 20, 2012." 77. It is material to note that the Special Leave Petition (SLP No. 13320/2020) preferred by the Revenue against the said decision was dismissed by the Supreme Court by an order dated 06.01.2021 78. Undeniably, the State ....
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....rce. The word 'curriculum' is from a new Latin word, which means "a course of study". It shares its roots in Latin where it mets. The word is defined in Oxford English Dictionary as "a regular course of study or training, as at a school or university". DNB and FNB courses run and managed by the petitioner follow a curriculum. Indisputably, DNB and FNB degrees granted by the petitioner are on culmination of a structural course. As a part of their curriculum, students are required to undergo practical training in accredited medical institutes for a specified tenure. The students have to submit their thesis and also have to appear for the minimum number of FAT. The course of DNB and FNB is a structured course. Although the students conduct their training with accredited medical institutions, the course is structured and managed by the petitioner. There is also no doubt that the students undergoing the said course are enrolled with the petitioner. Thus, although there is no classroom teaching by the petitioner; it is, undoubtedly, involved in imparting education to the students enrolled with it as a part of a curriculum. The course fee collected by the petitioner is forwarded to variou....