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2025 (3) TMI 765 - AAR - GST


ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

(i) Whether the services provided by the applicant to the school students by way of transportation of students and staff should be considered as services provided to the school (Educational Institute).

(ii) Whether the services provided by the applicant are exempted from GST as per Serial No.66 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 or any other applicable provision of the Act.

ISSUE-WISE DETAILED ANALYSIS

Issue (i): Services Provided to the School (Educational Institute)

Relevant legal framework and precedents: The legal framework involves the interpretation of whether services provided by the applicant to school students by way of transportation can be classified as services provided to an educational institution. The relevant statutes include the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act, particularly the provisions relating to service classification and exemptions.

Court's interpretation and reasoning: The Court examined the lease agreement between the applicant and the school, which was primarily executed to comply with statutory requirements. The agreement did not specify any consideration paid by the school to the applicant for transportation services, nor did it detail how transportation fees were to be collected.

Key evidence and findings: The applicant collected transportation fees directly from students, as evidenced by receipts indicating GST collection at a rate of 5%. The profit and loss account showed income solely from student transport fees, with no financial transactions involving the school.

Application of law to facts: The Court determined that since the applicant received all consideration directly from students and not from the school, the services were not rendered to the school. The role of the school was limited to compliance with statutory regulations, and it did not provide or receive any transportation services.

Treatment of competing arguments: The applicant argued that the service was provided to the school as per the lease agreement. However, the Court found that the agreement was a formality, and the actual service recipient was the student, not the school.

Conclusions: The Court concluded that the services provided by the applicant to the school students by way of transportation could not be considered as services provided to the school. The first question was answered in the negative.

Issue (ii): Exemption from GST

Relevant legal framework and precedents: The legal framework involves the interpretation of Serial No.66 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017, which exempts certain services provided to educational institutions from GST.

Court's interpretation and reasoning: The Court analyzed whether the transportation services provided by the applicant qualified for exemption under the said notification. The exemption applies only if services are provided to an educational institution.

Key evidence and findings: The applicant charged and collected GST from students directly, and no consideration was paid by the school for transportation services. The Court noted that the service was classified under SAC 9964, attracting GST at 5% without ITC.

Application of law to facts: Since the applicant received payment directly from students and not from the educational institution, the service did not qualify for exemption under the notification. The Court also examined other legal provisions and found no applicable exemptions.

Treatment of competing arguments: The applicant contended that the service was exempt due to its nature of transportation for educational purposes. However, the Court emphasized the necessity of a direct service relationship with the educational institution for exemption eligibility.

Conclusions: The Court concluded that the services provided by the applicant were not exempt from GST under Serial No.66 of Notification No. 12/2017-Central Tax (Rate) or any other provisions. The second question was answered in the negative.

SIGNIFICANT HOLDINGS

The Court established the following core principles:

(i) Services provided directly to students, with no financial involvement or service relationship with the educational institution, do not qualify as services provided to an educational institution.

(ii) For GST exemption under Serial No.66 of Notification No. 12/2017, there must be a direct service relationship with the educational institution.

Final determinations on each issue:

(i) The service provided by the applicant to the school students by way of transportation of students and staff cannot be considered as services provided to the school (Educational Institute).

(ii) The service provided by the applicant is not exempted from GST, either under Serial No.66 of Notification No. 12/2017 Central Tax (Rate) or any other provisions of the Act.

 

 

 

 

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