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2018 (5) TMI 648 - AAR - GSTLevy of GST - activity of preparing students for entrance exams - whether the services related to providing the coaching for entrance examination will come in the ambit of Goods and Service Tax? - applicant has argued that the word Education and institution has not been defined in GST Act - N/N. 12/2017- Central Tax (Rate) dated 28/06/2017. Held that - The applicant runs private institute, Simmple Shukla s Tutorials and is engaged in providing the service of teaching to the students of Class Xlth and Xllth science. This activity prepares the students for entrance examinations related to MBBS, Engineering and other science related examinations. However the institution Simmple Shukla s Tutorials is in no way covered in the definition of Educational institution as given in the above notification. The private institute does not have any specific curriculum and does not conduct any examination or award any qualification recognized by any law which would be covered in the above notification, The activity of applicant is not covered by the specific definition provided for interpretation of exemption notification. The education service provided in the case is taxable at the rate of 9 percent under CGST ACT and 9 percent SGST Act - question answered in affirmative.
Issues Involved:
Taxability of coaching services for entrance examinations under Goods and Service Tax. Analysis: Issue 1: Taxability of Coaching Services The applicant, running a tutorial institute providing coaching for entrance exams, sought clarification on the taxability of such services under the Maharashtra Goods and Services Tax Act, 2017. The applicant argued that education services fall under Chapter Heading 9992 and should be taxed at a nil rate as per Notification No.12/2017-Central Tax (Rate). However, the legal position states that the charging section 9(1) of the MGST and CGST Act, 2017 allows for the levy and collection of state and central tax on intra-State supplies of goods or services. The taxability of education services is governed by Notification No. 11/2017 Central Tax (Rate), which specifies a tax rate of 9 percent for such services under CGST and SGST Acts. Issue 2: Exemption for Educational Institutions The Government also issued Notification No. 12/2017-Central Tax (Rate), granting exemptions for certain education services provided by or in relation to educational institutions. The notification exempts services provided by educational institutions to students, faculty, and staff, including conducting entrance examinations, transportation, catering, security, cleaning, housekeeping services, and more. However, the exemption is limited to institutions providing specific types of education services as defined in the notification. Issue 3: Definition of Educational Institution The notification provides a specific definition for an educational institution, including institutions offering pre-school education, education up to higher secondary school, approved vocational education courses, and education for qualifications recognized by law. The applicant's private institute, although providing coaching for entrance exams, does not meet the criteria of an educational institution as defined in the notification. As a result, the coaching services provided by the applicant are not covered by the exemption and are taxable at the standard rate of 9 percent under CGST and SGST Acts. Conclusion: In conclusion, the Authority for Advance Ruling determined that coaching services for entrance examinations provided by the applicant's institute are taxable under the Goods and Service Tax at a rate of 9 percent under CGST Act, 2017, and 9 percent under MGST Act, 2017. The decision was based on the specific definitions and exemptions provided in the relevant notifications and the lack of alignment between the applicant's services and the criteria for educational institutions outlined in the exemption notification.
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