2021 (6) TMI 644 - AAR - GST

Permission for withdrawal of application - Exemption under Serial No. 66 of N/N. 12/2017-Central Tax (Rate) dated 28th June 2017 - Indian Institute of Technology Madras - educational Institution or not - rate of tax on services provided to Indian Institute of Technology Madras - nil rate applicable as per Serial no 3 of Notification No 12/2017 - Central Tax (Rate) dated 28th June 2017 or otherwise? - HELD THAT - In the case at hand, the applicant vide their application has stated that they provide security service to IIT Madras and when the documents related to the supply for which ruling is sought was called for, the applicant has stated that by mistake they had mentioned that the services are provided to IIT Madras in the application, while the services are being provided to IIITDM, Kancheepuram - the applicant had made elaborate submissions as to the constitution of IIT Madras in their application and their interpretation as to how the exempting entries as per Notification No. 12/2017 ibid is not applicable to IIT Madras. The applicant was informed the above statutory provisions during the hearing held on 09.04.2021 and they stated that they would withdraw the application filed by them in the instant case. Application is allowed to be withdrawn.

Summary

Issues:
1. Exemption under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate) for services provided to Indian Institute of Technology Madras.
2. Nil tax rate under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) for services provided to Indian Institute of Technology Madras.

Analysis:
1. The applicant, a provider of security services, sought a ruling on exemption eligibility for services to Indian Institute of Technology Madras under Serial No. 66 of the notification. The definition of "educational institution" under the notification was crucial, limiting the exemption to pre-school education and education up to higher secondary school. IIT Madras, while recognized for higher education, did not meet the criteria for exemption, being primarily a technical institute offering under-graduate, post-graduate, and Ph.D. programs in engineering, architecture, and science. Hence, the exemption did not apply, making the services taxable.

2. Regarding the nil tax rate under Serial No. 3 of the notification, it was highlighted that pure services provided to a Governmental authority for functions entrusted to Panchayats or Municipalities were exempt. However, security services for educational institutions were not considered functions of Panchayats or Municipalities. Even if IIT Madras qualified as a Governmental authority, security services provided were not exempt as they did not align with functions entrusted to Panchayats or Municipalities. The security of educational institutions was not a constitutional function of local bodies, thus not qualifying for exemption.

3. The applicant initially claimed to provide services to IIT Madras but later clarified that services were actually provided to Indian Institute of Information Technology, Design and Manufacturing, Kancheepuram. This discrepancy led to a re-examination of the application, ultimately resulting in the applicant withdrawing the application. The applicant's request to withdraw and file a fresh plea was permitted, leading to the ruling that the application seeking exemption for security services to IIT Madras under the mentioned notifications was allowed to be withdrawn.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the legal interpretations made, and the final ruling delivered by the Advance Ruling Authority.