2023 (9) TMI 765 - AAR - GST

Exemption from GST - educational institution - collection of transportation charges from parents will be taxed or exempted under GST, since only school students are only picked up and dropped, and school staff which will be covered in the agreement with school - percentage of GST to be charged from parents and school - HELD THAT - It is seen from the submissions made by the Applicant that they propose to provide the service of picking up and dropping of school children and staff of higher secondary school in bus and/or by van and not of the general public; that the service will be provided under agreement with schools; that the bus and van permits will be in the name of respective schools; that the applicant will be receiving the payments for the services directly from the parents, as per advice and agreement with school; and that for picking up and dropping of the teachers and staff, the respective school will pay. The Applicant did not submit any copy of the agreement entered with the schools as the whole activity is only proposed to be undertaken. The Applicant propose to provide the service of picking up and dropping of school children and staff of higher secondary school in bus and/or by van by entering into an agreement with the schools. Further the bus and van permits will be in the name of respective schools. Thus, the Applicant's proposed activity of providing transport services to the education institutions by way of transportation of students and staff, will become eligible for exemption vide Sl.No. 66(b) of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, if the services provided by the Applicant is to an educational institution as defined in Para No. 2(y) of the said notification and necessary permit has been obtained as mandated under the Tamilnadu Motor Vehicles (Regulation and Control of School Buses) Special Rules 2012.

Summary

Issues involved:
The judgment addresses the applicability of GST on transportation services provided exclusively to students and staff of certain schools, the taxability of transportation charges collected from parents, and the percentage of GST to be charged in such scenarios.

Applicability of GST on the service:
The applicant, an unregistered individual seeking to provide pick up and drop services exclusively to school students and staff, raised queries regarding the GST applicability on the proposed service. The State and Centre tax authorities opined that transportation services to educational institutions for students and faculty are exempted from GST under specific provisions. The authorities highlighted that the exemption is contingent upon agreements executed with schools and vehicle owners for transportation services provided to educational institutions. The judgment considered the submissions made by the applicant and the tax authorities under Section 97(2) of the GST Act, 2017.

Taxability of transportation charges:
The applicant inquired whether the collection of transportation charges from parents would be taxed or exempted under GST, given that the service is exclusively for school students and staff. The judgment noted that the applicant's proposed activity of providing transportation services to educational institutions falls under the exemption provided in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The ruling emphasized that the service, as defined in the Act, amounts to the supply of a service and is exempted from GST under specific provisions.

Percentage of GST to be charged:
The judgment deliberated on the percentage of GST to be charged to parents and schools for arranging the pick up and drop services for their staff and students. It considered the definitions and conditions outlined in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 to determine the applicability of GST on the transportation services provided exclusively to educational institutions. The ruling clarified that the proposed activity of the applicant, falling within the definition of an educational institution, is exempted from GST under the specified provisions.