28.10.2022: No GST exemption for educational service providers other than formal schools: Kerala AAR

Providing educational services to the individual student through an online mechanism by an institution other than a formal school will attract Goods & Services Tax (GST), Kerala Authority for Advance Ruling (KAAR) has said.

Ernakulam-based Tutor Comp Info Tech Private Limited offers educational services in three categories – to individual students, institutions & the students and the government. It moved KAAR to seek an advance ruling regarding exemption from GST on the transaction between it and individual students on a one-to-one basis and to provide education up to higher secondary schools.

The key issue in this matter is serial number 66(A) applicability of Notification No.12/20 17- Central Tax (Rate). Under this serial number, services provided by an educational institution to its students, faculty and staff, and another educational institution will be exempted from GST. Services here include transportation of students, faculty and staff, catering, any mid-day meals scheme sponsored by Governments, security or cleaning or housekeeping services performed in such educational institution and services relating to admission to or conduct of the examination. The exemption will be available to institutions providing education up to higher secondary.

The applicant submitted it is imparting training to young children. The training is as per the course curriculum followed by the said student in their school. Hence the activity of the applicant falls within the meaning of the term “education”, and also the applicant is an “institution”. Since the applicant provides education, it is an “educational institution” and is liable for the exemption.

After going through all the facts and arguments, KAAR observed that the applicant is not a formal school but an institution providing special training/coaching to students who are enrolled in formal schools for education up to higher secondary or equivalent. Even though the activity; training and coaching undertaken by the applicant can be claimed to be education services in layman’s understanding, those activities do not qualify as education up to higher secondary.

“The training provided by the applicant neither leads to grant of any qualification recognised by any law for the time being in force nor is part of an approved vocational education course. Therefore the applicant is not covered under the scope of definition of educational institution,” it said while ruling out exemption.

Source: The Hindu Business Line 

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