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2019 (7) TMI 1332 - AAR - GSTEducational Institution - services provided to Visvesvaraya National Institute of Technology, Nagpur - exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28 th June 2017 - Rate of tax. Whether the services provided to Visvesvarayya National Institute of Technology, Nagpur will qualify for exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017, considering it to be an educational Institution? - HELD THAT - The applicant is of the opinion that the said Sr.No. 66 is not applicable in their case but VNIT has informed them that GST is not applicable on security services provided by the applicant to them. As per Sr.No.66 (b) (iii) security services or cleaning services or housekeeping services supplied to an educational institution attracts NIL rate of GST. Hence to avail of the benefit of Sr. No.66 mentioned above in the subject case, since the security services are provided by the applicant to VNIT, the latter must fall under the definition of an educational institution . VNIT as per the submissions made by the applicant is not engaged in providing preschool education and education up to higher secondary school or equivalent. Since VNIT as a technical institute is engaged in imparting under-graduate courses, post-graduate courses and Ph. D programs in the field of engineering, architecture and science thereby being engaged in imparting education as a part of a curriculum for obtaining a qualification recognised by law for the time being in force, it would get covered under the definition of educational institution vide clause (ii) mentioned above and therefore it is seen that the security services as in the subject case are provided to an educational institution i.e. VNIT. The applicant has been given the status of a Deemed University by the University Grants Commission. The UGC was formally established 1956 as a statutory body of the Government of India through an Act of Parliament for the coordination, determination and maintenance of standards of university education in India. Since the VNIT has been recognized by the UGC, this would imply that the courses conducted by the applicant are recognized by law - the education provided by VNIT is a part of a curriculum for obtaining a qualification recognised by any law for the time being in force. The proviso to Sr. No. 66 mentioned above very clearly states that only services provided to an educational institution which provides services by way of pre-school education and education up to higher secondary school or equivalent, will be exempt. In the subject case the applicant is not providing services, as an educational institution, by way of pre-school education and education up to higher secondary school or equivalent. Hence Security services provided in the instant case will not be exempt from payment of GST. Whether rate of tax on services provided to Visvesvaraya National Institute of Technology, Nagpur (VNIT) is nil as per Serial no 3 of Notification No 12/2017-Central Tax (Rate) dated 28th June 2017? - HELD THAT - Sr. No. 3 of Notification No. 12/2017, exempts pure services provided to a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243 W of the Constitution. Thus it is seen that not all services supplied to Governmental authority are exempt from the provisions of goods and services tax. The services supplied should be in nature of, or conform to the function entrusted to them under the Constitution. VNIT has neither been set up by an Act of Parliament or a State Legislature; nor has been established by any Government, with ninety percent or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243 W of the Constitution or to a Panchayat under Article 243G of the Constitution. Hence they cannot be considered as a Governmental Authority - Sr. No. 3 of Notification No, 12/2017 is also not applicable in the subject case.
Issues Involved:
1. Whether the services provided to Visvesvaraya National Institute of Technology, Nagpur (VNIT) qualify for exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017, considering it to be an educational institution. 2. Whether the rate of tax on services provided to VNIT is nil as per Serial No. 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017. Issue-wise Detailed Analysis: Issue 1: Exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017 The applicant, Security and Intelligence Services (India) Ltd, provides security services to VNIT, an educational institution established under the scheme sponsored by the Government of India and the Government of Maharashtra. VNIT has been conferred the status of a Deemed University and declared as an Institute of National Importance by an Act of Parliament. The term "educational institution" under clause (y) of Part 2 of the notification means an institution providing services by way of: - Pre-school education and education up to higher secondary school or equivalent. - Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force. - Education as a part of an approved vocational education course. VNIT provides under-graduate, post-graduate, and doctoral programs in engineering, architecture, and science, qualifying it as an educational institution under clause (ii) of the definition. However, the proviso to Serial No. 66 states that the exemption applies only to institutions providing pre-school education and education up to higher secondary school or equivalent. Since VNIT does not fall under this category, the security services provided to VNIT do not qualify for exemption under Serial No. 66. Issue 2: Rate of Tax under Serial No. 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017 Serial No. 3 of Notification No. 12/2017 exempts "pure services" provided to a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or to a Municipality under Article 243W of the Constitution. The term "Governmental authority" is defined as an authority or board set up by an Act of Parliament or a State Legislature or established by any Government with 90% or more participation by way of equity or control, to carry out any function entrusted to a Municipality under Article 243W or to a Panchayat under Article 243G. VNIT, although established under a government scheme and declared as an Institute of National Importance, does not meet the criteria of being set up by an Act of Parliament or a State Legislature or having 90% or more government participation by way of equity or control. Furthermore, the security services provided do not relate to any function entrusted to a Panchayat or Municipality under the Constitution. Therefore, the services provided to VNIT do not qualify for exemption under Serial No. 3 of Notification No. 12/2017. Conclusion: 1. The services provided to VNIT do not qualify for exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017. 2. The rate of tax on services provided to VNIT is not nil as per Serial No. 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017.
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