Applicant: M/s Master Minds
AAR NO. 08/AP/GST/2020 dated 05.03.2020
Fact of the case
The applicant is providing coaching to students for chartered Accountancy certificate (‘CA’); Cost and Works Accountancy Certificate (‘ICWA) and Intermediate Certificate. The coaching provided by the applicant enables the students to appear for the examinations conducted by the respective statutory bodies.
The applicant’s registration with service tax department was migrated to GST under GST Act w.e.f. 01.07.2017. However, on the request of the applicant on the ground that the educational services provided by the applicant were exempted under GST vide entry no 66 of Notification No.12/2017 Central Tax dated 28.06.2017, the department approved cancellation of Migrated Registration.
The applicant was initially registered with the service tax department as a service provider under the category of ‘commercial Training or coaching centre’ and was paying service tax. However, when exemption was provided to the services of a commercial Training or coaching centre by way coaching that leads to any certificate recognized by law, under Notification No.33/2011 -ST dt. 25.04.2011, he stopped payment of service tax on due intimation to the service tax department.
The service tax department issued show cause notices demanding service tax on the fee collected by the applicant and certain demands were dropped and some confirmed with the reasons detailed below, as can be seen from the copies of the show cause notices and orders submitted by the applicant along with his application:
(a) The demands in respect of the coaching provided for obtaining certificates of CA-Final, CA-Inter (IPCC) and ICWA Final are not sustainable since the coaching provided for these courses lead to grant of any certificates issued by statutory bodies duly recognized under Law enacted by the Parliament.
(b) The demands in respect of the coaching provided for CPT (now called CA-Foundation) and ICWA-Foundation (presently called ICWA Foundation) are sustainable since the coaching provided for these courses does not lead to grant of any certificates recognized by Law.
(c) The demands in respect of coaching provided for the Intermediate course is not correct since the intermediate certificate issued by the Board of Intermediate Education is a certificate recognized under law but since the demand is sustainable as the applicant had not provided the details of all the students to whom the coaching is provided and since the applicant is collected more fee than that prescribed by the Board of Intermediate Education.
The above orders were accepted by the committee of Chief Commissioners of the department and the service tax department had not filed any appeal against the said orders. However, the applicant filed appeals before the Tribunal against the confirmation of demands on certain courses and the same are pending before it.The applicant was even granted refund of the service tax paid on such services by the jurisdictional Assistant commissioner and the department had not filed any appeal against such refund order.
With the introduction of the GST, the applicant desires to know whether the same exemption provided under the Finance Act, 1994 is applicable to him under the GST Law,also since identical exemption was provided under both the Laws. He accordingly filed the present application.
Questions on which advance ruling sought
1.Whether the services of ‘supply of service of education’ as per the curriculum prescribed by the statutory authorities/ government to the students of the applicant for obtaining qualifications/ certificates of CA-Foundation, CA-Inter, CA-Final, CMA (ICWA)-Foundation, CMA-Inter, CMA-Final and Intermediate duly recognized by the respective statutory authorities/ government are exempted under Notification No.12/2017-CT (Rate) dt.28.06.2017 (entry no.66(a)), as amended?
2.Whether the charges collected for providing accommodation to the students undergoing the above courses are exempted from GST as provided under Notification No.12/2017-CT (Rate) dt. 28.06.2017 (entry no.14), as amended read with Circular No.32/06/2018-GST dt. 12.2.2018 since the amount charged from the students by the hostel run by the applicant is less than Rs.1000/- per day?
3.Whether the charges collected by the applicant for catering service by supplying food to the students undergoing the above courses are exempted from GST as provided under Notification No.12/2017-CT (Rate) dt. 28.06.2017 (entry no.66(a)), as amended?
Observations and findings of the Bench
Bench has examined the issue raised in the application. The taxability and the applicable rate of tax for the goods and services supplied or to be supplied, as governed under the provisions of respective GST Acts are examined. In view of the submission made by the applicant we find that the basic issue before us is whether the services of supply of service of education as per the curriculum prescribed by the statutory authorities/ government to the students of the applicant for obtaining qualifications/ certificates of CA-Foundation, CA-lnter, CA-Final, CMA (ICWA)-Foundation, CMA-Inter, CMA-Final and Intermediate duly recognized by the respective statutory authorities/ government are exempted under Notification No.12/2017-CT (Rate) dt. 28.06.2017 (entry no.66(a)), as amended or not.
Similar exemption granted under negative tax regime of service tax is extended to the educational sen ices in GST regime also. Entry no.66 of Notification No. 12/2017 -Central Tax (Rate) dt. 28.06.2017 as amended by Notification No. 2/2018-Central tax (Rate) dated 25.01.2018, extracted below specifies the following education services as exempted from GST.
“services provided –
(c) By an educational institution to its students, faculty and staff:
(d) To an educational institution, by way of, –
(v) Transportation of students, faculty and staff;
(vi) Catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;
(vii) Security or cleaning or house-keeping services performed tn such educational institution;
(viii) Services relating to admission to, or conduct of
examination by, such institution; up to higher secondary:
Provided that nothing contained in entry (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.”
The term ‘educational institution’ is also defined under the GST Act in Notification No. 12/2017 – Central Tax (Rate), dated 28.06.2017 as follows:
“educational institution” means an institution providing 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 recognized by any law for the time being in force;
(iii) education as a part of an approved vocational education course;
The service provided by the applicant to the aspirants of CA (Inter & Final) and ICWA (Inter & Final) does not ensure that the student obtains a qualification recognized by any law and hence the same does not fall under clause (ii) of the definition given to ‘Educational Institution’.
The coaching or training provided by the applicant is for preparing the students for writing/appearing CA(Inter & Final) and ICWA (Inter & Final) Exams conducted by ICAI/ ICWAI. The said coaching or training per se does not lead to grant of a certificate or diploma or degree or qualification which is recognized by any law. It only aims at giving a better preparation to the students and improves their chances in the examination. It is similar to any other coaching or training given in respect of competitive / entrance examinations such as IIT, EAMCET etc.
Therefore, the coaching or training service provided by the applicant to the aspirants of CA-Foundation, CA-lnter, CA-Final, CMA (ICWA)-Foundation, CMA Inter, CMA-Final and Intermediate is not the sen’ice provided by means of ‘education as a part of curriculum that has been prescribed for obtaining a qualification prescribed by law’. Hence it cannot be said that the coaching / training given by the applicant to CA aspiring students (for appearing and qualifying in the examinations) would lead to grant of certificate/qualification recognized by law. Therefore, the service rendered by the applicant is 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’.
The services of provision of food and accommodation to the students perusing the said courses are liable to GST under the same notification and also as clarified vide CBIC Circular No.85/04/2019 -GST, dt. 01.01.2019 that supply of food, beverages by an educational institution to its students, faculty and staff, where such supply is made by the educational institution itself, is exempt under Notification No. 12/2017 -Central Tax (Rate) dated 28.06.2017, vide Sl. No. 66 w.e.f. 01-07-2017 itself. As applicant not qualified as an educational institute, the above exemptions won’t be applicable.
RULING
Whether the services of supply of senice of education as per the curriculum prescribed by the statutory authorities/ government to the students of the applicant for obtaining qualifications/ certificates of CA-Foundation, CA-lnter, CA-Final, CMA (ICWA)- Foundation, CMA-lnter, CMA-Final and Intermediate duly recognized by the respective statutory authorities/ government are exempted under Notification No. 12/2017 -CT (Rate) dt. 28.06.2017 (entry no.66(a)), as amended?
The applicant is not eligible for thc exemption under Entry No.66(a) of Notification No. 12/2017 -CT(Rate) dated 28.06.2017, as amended.
Whether the charges collected for providing accommodation to the students undergoing the above courses are exempted from GST as provided under Notification No.12/2017 -CT (Rate) dt. 28.06.2017 (entry no. 14), as amended read with Circular No. 32/06/2018 -GST dt. 12.02.2018 since the amount charged from the students by the hostel run by the applicant is less than Rs. 1000/- per day?
The applicant is not eligible for the exemption under Entry No. 14 of Notification No. 12/2017 -CT(Rate) dated 28.06.2017.
Whether the charges collected by the applicant for catering service by supplying food to the students undergoing the above courses are exempted from GST as provided under Notification No. 12/2017 -CT (Rate) dt. 28.06.2017 (entry no.66(a)), as amended?
The applicant is not eligible for the exemption under Entry No.66(a) of Notification No. 12/2017-CT(Rate) dated 28.06.2017.
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