2019 (3) TMI 1987 - AAAR - GST

Exemption from GST - course Executive Post Graduate Programme in Management (EPGP) - eligibility for exemption after enactment of JIM Act, 2017 notified w.e.f. 31-01-2018 - HELD THAT - At present, Indian Institutes of Managements are providing various long duration programs (one year or more) for which they award diploma/degree certificate duly recommended by Board of Governors as per the power vested in them under the IIM Act, 2017. Therefore, it is clarified that services provided by Indian Institutes of Managements to their students- in all such long duration programs (one year or more) are exempt from levy of GST. As per information received from IIM Ahmedabad, annexure 1 to this circular provides a sample list of programmes which are of long duration (one year or more), recognized by law and are exempt from GST. For the period from 1st July, 2017 to 30th January, 2018, IIMs were not covered by the definition of educational institutions as given in notification No. 12/2107-Central Tax (Rate) dated 28-06-2017. Thus, they were not entitled to exemption under Sl. No. 66 of the said notification - for the period from 1st July, 2017 to 30th January, 2018, GST exemption would be available only to three long duration programs. Indian Institutes of Managements also provide various short duration/short term programs for which they award participation certificate to the executives/professional as they are considered as participants of the said programmes. These participation certificates are not any qualification recognized by law. Such participants are also not considered as students of Indian Institutes of Management. Services provided by IIMs as an educational institution to such participants is not exempt from GST. Such short duration executive programs attract standard rate of GST@18%. Thus, it is crystal clear that from 31st January, 2018 onwards all long duration programs (one year or more) conferring degree/diploma as recommended by Board of Governors as per the power vested in them under the IIM Act, 2017 including one-year Post Graduate Programs for executives, are exempt from GST.

Summary

Issues Involved:
1. Taxability of the Executive Post Graduate Programme (EPGP) under GST.
2. Applicability of exemptions under Notification No. 12/2017-Central Tax (Rate) and the IIM Act, 2017.
3. Interpretation of "educational institution" under GST provisions.
4. Validity of the Advance Ruling issued by the Authority for Advance Ruling (AAR).

Issue-wise Detailed Analysis:

1. Taxability of the Executive Post Graduate Programme (EPGP) under GST:
The primary issue for determination was whether the EPGP course offered by the Indian Institute of Management (IIM) Indore is exempt from GST post the enactment of the IIM Act, 2017. The AAR had ruled that the EPGP course is chargeable to GST, despite the enactment of the IIM Act, 2017, which the appellant contested.

2. Applicability of exemptions under Notification No. 12/2017-Central Tax (Rate) and the IIM Act, 2017:
The appellant argued that post the enactment of the IIM Act, 2017, they qualify as an "educational institution" under entry no. 66 of Notification No. 12/2017-Central Tax (Rate), which exempts services provided by educational institutions. The appellant contended that the EPGP course should be exempt as it leads to a qualification recognized by law.

3. Interpretation of "educational institution" under GST provisions:
The definition of "educational institution" under Notification No. 12/2017-Central Tax (Rate) includes institutions providing education as part of a curriculum for obtaining a qualification recognized by any law in force. The appellant claimed that post the IIM Act, 2017, IIMs, including IIM Indore, fall within this definition, thereby making their long-duration programs (one year or more) eligible for GST exemption.

4. Validity of the Advance Ruling issued by the Authority for Advance Ruling (AAR):
The appellant challenged the AAR's ruling, arguing that it failed to consider the implications of the IIM Act, 2017, and the subsequent circulars and notifications that clarified the tax status of programs offered by IIMs. The appellant sought to set aside or modify the AAR's ruling, asserting that it was arbitrary and lacked merit.

Discussion and Findings:

The Appellate Authority reviewed the submissions and relevant documents, including Circular No. 82/01/2019-GST, which clarified the applicability of GST on various programs conducted by IIMs. The circular stated that from 31st January 2018 onwards, all long-duration programs (one year or more) offered by IIMs, which confer degrees or diplomas as recommended by their Board of Governors, are exempt from GST. This includes the one-year EPGP offered by IIM Indore.

Order:

The Appellate Authority concluded that the one-year full-time EPGP offered by IIM Indore is exempt from GST from 31st January 2018 onwards, in light of Circular No. 82/01/2019-GST. The AAR's ruling was set aside, and it was held that the EPGP course is exempt from GST.