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2021 (11) TMI 400 - AAAR - GSTExemption from GST - educational assessment examination (ASSET) with its variants provided by the applicant to school/educational organization - Sr. No. 66(b)(iv) of the Not. No. 12/2017-CT (rate) dated 28.06.2017 and entry No. 69(b)(iv) of Not. No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 as well as equivalent SGST Notification - HELD THAT - As per Entry at Sl. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate), services provided to an educational institution, by way of, services relating to admission to, or conduct of examination by, such institution is exempted from GST. The services being provided by the applicant are admittedly not relating to admission to educational institution. Therefore, it needs to be examined whether the services being provided by the applicant are services provided to an educational institution, by way of services relating to conduct of examination by such institution . It appears from the entire scheme of the ASSET that the schools have the minimal role in it. In the terms and conditions attached with the School Summary Form (EB / ARO) 2019 submitted by the applicant, one of the conditions is that, Fees from the students should be charged as per the offer availed by your school . It therefore appears that the schools are required to collect the fees for ASSET from the students, as determined by the applicant and remit the same to the applicant. As mentioned in the School Summary Form (EB / ARO) 2019, it appears that the schools are offered 10% Discount towards Administration cost - It is therefore evident that the schools are not conducting the ASSET, rather the schools are facilitating the applicant to conduct ASSET for which the schools get some amount towards administration cost. Whether the ASSET can be said to be conducted by schools, even if it is used to evaluate the performance of students for giving internal marks by the schools? - HELD THAT - The schools may find ASSET to be a good tool to evaluate students level of understanding of different subjects and may also find the detailed reports given by the applicant to be useful for devising future course of action by the schools. Therefore, schools may enter into agreement with the applicant with a condition that all students in a class would take ASSET. The condition of the agreement only leads to a conclusion that unless the school agrees to take ASSET for all the students in a class, the applicant would not enter into a contract with that school to conduct ASSET. However, such condition in an agreement cannot change the nature of ASSET and it will not make ASSET an examination conducted by the schools. ASSET being held by the applicant cannot be said to be service provided to schools, much less services relating to conduct of examination by such schools. Therefore, exemption from payment of Goods and Services Tax, as provided under Entry at Sl. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended and corresponding Notification No. 12/2017-State Tax (Rate) dated 30.06.2017, as amended, is not available to ASSET - Appeal allowed.
Issues Involved:
1. Whether the ASSET assessment examination provided by the applicant to schools/educational organizations is exempt from GST under specific notifications. 2. Interpretation of the term "services relating to admission to, or conduct of examination by, such institution" under Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate). Detailed Analysis: Issue 1: GST Exemption for ASSET Assessment Examination The applicant, M/s. Educational Initiative Private Limited, sought an advance ruling on whether their ASSET assessment examination is exempt from GST under Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) and corresponding state notifications. ASSET is a tool for educational assessment for students in classes 3-10, designed to measure understanding of skills and concepts rather than rote learning. The applicant argued that their service is related to the conduct of examinations by educational institutions and thus should be exempt from GST. The Gujarat Authority for Advance Ruling (GAAR) initially ruled in favor of the applicant, stating that the services provided by the applicant help educational institutions in their act of examination and are therefore eligible for GST exemption. Issue 2: Interpretation of "Services Relating to Admission to, or Conduct of Examination by, Such Institution" The department appealed against the GAAR ruling, arguing that the applicant’s services go beyond just conducting examinations and include diagnostic assessment and personalized learning, which do not qualify for the GST exemption. The department highlighted that ASSET is an assessment program that evaluates student performance, provides personalized feedback, and offers a series of educational services, which are not limited to the conduct of examinations. The appellate authority examined whether ASSET can be considered an examination conducted by the schools. It was found that: - The question papers and test materials are prepared and printed by the applicant. - The dates for ASSET are fixed by the applicant. - The applicant assesses the answers and prepares the results, not the schools. - The detailed analysis and practice tests provided by the applicant go beyond the scope of merely conducting examinations. The authority concluded that ASSET is conducted by the applicant, not the schools, and thus does not qualify as a service related to the conduct of examinations by educational institutions. Findings: The appellate authority determined that: - The services provided by the applicant in the form of ASSET are not exempt from GST as they do not fall under the scope of "services relating to admission to, or conduct of examination by, such institution" as specified in Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate). - The entire gamut of activities related to ASSET, including setting question papers, fixing test dates, assessing answers, and providing detailed analysis, is carried out by the applicant, not the schools. Conclusion: The appeal filed by the department was allowed, and the GAAR ruling was modified. The appellate authority held that ASSET conducted by M/s. Educational Initiative Private Limited is not covered under the specified entry of the notification and is therefore not exempt from GST.
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