2021 (1) TMI 595 - AAR - GST

Exemption from GST or not - Educational Services or not - services provided by the applicant in affiliation to/ partnered with Gujarat University and providing education for degree courses to students under specific curriculum as approved by the Gujrat University, for which degrees are awarded by the Gujarat University - applicability of N/N. 12/ 2017-Central Tax (Rate) dated 28th June, 2017 - HELD THAT - The applicant is a company enacted under the Company Act, 1956. They are having necessary expertise in the fields of Computer Animation, IT-Infrastructure Management System and Mobile Computing Application Education - an Agreement and a Memorandum of Understanding (MOU) are entered into on 05.07.2017 between the Applicant and the Gujarat University, Ahmedabad for knowledge sharing in the fields of Computer Animation, Mobile Computing Application, IT-Infrastructure Management Systems (ITIMS) for Skill development, Entrepreneurship development, Youth empowerment and promotion of skill based training. The applicant is an educational consultant and a professional in the fields of Computer Animation, IT-Infrastructure Management System and Mobile Computing Application Education, which uses their experience and knowledge in teaching, to help with curriculum development and other issues to Gujarat University and parents face. The applicant designs and handles the courses, namely M.Sc.-IT in Animation, M.Sc.-IT in Mobile application, M.Sc.-IT in IMS (Infrastructure Management Systems) and M.Sc.-IT in Network Securities, which undertaken by Gujarat University. The applicant then on the basis of the approved courses, provide training to the students. Further, the applicant also helps to administer the admission and fees collection process. Training given by the applicant as a Private Institutes would not be covered, as such training does not lead to grant of a recognized qualification. Thus, the applicant does not have any specific curriculum and does not conduct any examination or award any qualification/degree. Hence, the applicant does not qualify as educational institution - In this process, the applicant received Fees (i.e. 60% of total fees collected from students by Gujarat university) from Gujarat University, which attract GST @18%. Thus, the applicant is not at all entitled for exemption in respect of said services provided by the applicant to Gujarat University, under Entry at Sr. No. 66 of the exemption Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, as amended.

Summary

Issues Involved:
1. Whether the services provided by the applicant in affiliation with Gujarat University for degree courses are exempt from GST under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017.

Issue-wise Detailed Analysis:

1. Nature of Services Provided by the Applicant:
- The applicant, M/s D.M. Net Technologies, is engaged in providing specified educational services in Information Systems Education in partnership with Gujarat University. The courses include M.Sc.-IT in Animation, Mobile Application, IMS (Infrastructure Management Systems), and Network Securities.
- The applicant designs the courses, which are then approved by Gujarat University. The training is provided under the MOU with the university.
- Gujarat University handles awareness, admission, and fee collection, while the applicant assists in administering these processes.
- The infrastructure for the courses is provided by Gujarat University, and the university conducts the examinations and awards degrees.

2. Relevant Provisions under GST Law:
- The unified GST, effective from 1st July 2017, exempts certain educational services from GST as per Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017.
- Entry No. 66 of the notification exempts services provided by educational institutions to students, faculty, and staff.
- An "educational institution" is defined as an institute providing services by way of pre-school education, education up to higher secondary school, education as part of a curriculum for obtaining a qualification recognized by law, or as part of an approved vocational education course.

3. Applicant’s Argument:
- The applicant argues that they qualify as an "educational institution" since they provide education in affiliation with Gujarat University, which grants recognized qualifications (degrees).
- They cited a similar case from Karnataka (M/s Emerge Vocational Skills Private Ltd.), where services provided in affiliation with a university were exempt from GST under Entry No. 66.

4. Authority’s Discussion and Findings:
- The authority examined the nature of the applicant's services and the relevant GST provisions.
- The applicant is a company under the Companies Act, 1956, with expertise in Computer Animation, IT-Infrastructure Management System, and Mobile Computing & Application Education.
- An Agreement and MOU with Gujarat University outline the responsibilities of both parties, including financial viability, quality delivery, curriculum approval, infrastructure provision, and fee collection.
- The fee collected from students is shared between Gujarat University and the applicant in a 40:60 ratio.

5. Analysis of Entry No. 66 and Definition of Educational Institution:
- Entry No. 66 exempts services provided by educational institutions to students, faculty, and staff.
- The term "educational institution" includes institutions providing education as part of a curriculum for obtaining a qualification recognized by law.
- The key criterion is that the education delivered must result in a legally recognized qualification.

6. Conclusion:
- The authority concluded that the applicant does not qualify as an educational institution because they do not have a specific curriculum, do not conduct examinations, and do not award qualifications/degrees.
- The applicant's services, therefore, do not fall under the exemption provided in Entry No. 66.
- The fees received by the applicant from Gujarat University attract GST at 18%.

Ruling:
- The services provided by the applicant in affiliation with Gujarat University for degree courses are not exempt from GST under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017.