Collection of examination fees charged by the university or institution and remitting same as it is to the university without any value addition comes under pure agent concept, hence value to be excluded from the taxable value.

Facts: The applicant is a private limited company providing the coaching, learning and training services in relation to the under-graduate, graduate and post-graduate degree, diploma and professional courses on a standalone bases to the students or for any institution, corporate company, institutes, universities and colleges. 

The applicant also collects amount as examination fees from the students and remits the same to the respective colleges or institution without any value addition to it. The applicant contended that in such cases, the applicant acts as a pure agent and this payment is separately indicated in the invoice issued to the respective students. Further, this service is in addition to the services of training and coaching institute.  

Issue: Whether the activity of collecting the examination fees from the students and remitting the same to that particular university or institution without any value addition to it, would be taxable service.

AAR Observations and decision: The applicant collects fees for coaching or training classes they conduct, from the students which attracts GST. Apart from this the applicant also collects certain amount as examination fees from the students and remits the same to the respective colleges or institution without any value addition to it. The applicant is providing this kind of facility to the student in addition to the services as training and coaching institute.

Hence, the applicant satisfies all the conditions of the pure agent as provided in Rule 33 of the CGST Rules, 2017. Therefore the amount of fees collected by the applicant from the student as examination fees which is remitted to the respective institute or college or universities is excluded from the value of supply.  

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