2022 (2) TMI 713 - AAR - GST

Taxable supply of services or not - privity of contract - income earned from conducting Guest Lectures - income earned from Research and Training Projects funded by Ministries of Government of India and State Government of Karnataka - taxable supply of service to be taxed at Nil rate as per Heading 9992 or not - income earned from Research and Training Projects funded by Ministries of Government of India and State Government of Karnataka - taxable Supply to be taxed at (Integrated Tax) 18% under Heading 9983 or not - HELD THAT - The applicant states that he is a Professor of Law at National Law School of India University, Bengaluru and is engaged in classroom teaching and training for students and other personnel. He also states that he is also invited by multiple Universities and Colleges of National Repute to deliver Guest Lectures. The applicant states that he provides teaching and training and interconnected activities under Research and Training Projects granted by the Government of India and State Government of Karnataka and International Institutions such as UNDP - The applicant likes to know whether the income earned from conducting guest lectures amounts to taxable supply of service. The applicant is of the opinion that guest lectures rendered by him on law and legal awareness acts as a refreshment or diversion from the usual monotony and hence the services provided by him by way of training are recreational activities relating to arts or culture and as such, is non-taxable as the same falls under Entry No.80 of Notification No.12/2017 Central Tax (Rate) dated 28.06.2017, chargeable at 'NIL'. The applicant states that he provides teaching and training and interconnected activities under Research and Training Projects granted by the Government of India and State Government of Karnataka. The applicant likes to know whether the income earned from Research and Training Projects funded by Ministries of Government of India and State Government of Karnataka, amounts to taxable supply of service to be taxed at Nil rate as per Heading 9992 or amounts to or results to as taxable supply to be taxed at Integrated Taxed 18% under Heading 9983 - It is seen that there is no privity of contract between the applicant and the Government and hence this entry is not applicable for the services rendered by the applicant. The applicant has provided a copy of MOU signed between Ministry of Environment, Forest and Climate Change, Government of India and Centre for Environmental Law Education, Research and Advocacy (CEERA), National Law School of India University. But there is no privity of contract between Ministry of Environment, Forest and Climate Change, Government of India and the Applicant. Hence the same is not covered under item 72 of the said Notification - Since no information is forthcoming with regard to the recipient of services, the service in question merits classification under SAC 9983 and attracts GST at the rate of 18%.

Summary

Issues Involved:
1. Taxability of income earned from conducting Guest Lectures.
2. Taxability of income earned from Research and Training Projects funded by Ministries of Government of India and State Government of Karnataka under Heading 9992.
3. Taxability of income earned from Research and Training Projects funded by Ministries of Government of India and State Government of Karnataka under Heading 9983.

Detailed Analysis:

1. Taxability of Income Earned from Conducting Guest Lectures:
The applicant, a Professor of Law, sought clarification on whether income from guest lectures is taxable. The ruling determined that guest lectures fall under SAC 9983, "Other professional, technical, and business services," and do not qualify for exemption under Entry No.80 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, which pertains to recreational activities related to arts or culture. Therefore, the income from guest lectures is taxable at 18% GST.

2. Taxability of Income from Research and Training Projects under Heading 9992:
The applicant inquired if income from Research and Training Projects funded by Government Ministries could be taxed at a Nil rate under Heading 9992. The ruling clarified that for services to be exempt under Heading 9992, two conditions must be met: the training must be provided to the Central or State Government, and the total expenditure must be borne by these governments. The applicant failed to provide evidence that these conditions were met, specifically the privity of contract between the applicant and the government. Consequently, the services do not qualify for exemption under Heading 9992 and are taxable.

3. Taxability of Income from Research and Training Projects under Heading 9983:
The applicant also sought clarification on whether the same income could be taxed at 18% under Heading 9983. The ruling confirmed that in the absence of details about the recipient of the services, the income from these projects should be classified under SAC 9983, attracting an 18% GST rate. The ruling emphasized that without clear information on the recipient, the services could not be classified under Heading 9992 for exemption and thus default to the taxable category under Heading 9983.

Conclusion:
- Guest Lectures: Taxable under SAC 9983 at 18% GST.
- Research and Training Projects (Heading 9992): Not exempt due to lack of evidence on conditions; taxable.
- Research and Training Projects (Heading 9983): Taxable under SAC 9983 at 18% GST due to insufficient recipient details.

The ruling underscores the importance of clear contractual relationships and detailed information about service recipients for tax classification and exemption purposes.