Educational services - Service Tax Practice Manual / Ready Reckoner - Service Tax

Chapter 9 Educational services Effective date: (1st July, 2012) Scope of Exempt Service - Notification no. 25/2012 dated 20.06.2012 From 1.4.2012 to 31.3.2013 9. Services provided to or by an educational institution in respect of education exempted from service tax, by way of,- (a) auxiliary educational services; or (b) renting of immovable property; From 1.4.2013 to 10.7.2014 - Notification no. 3/2013 - ST dated 1.3.2013 9. Services provided to an educational institution in respect of education exempted from service tax, by way of,- (a) auxiliary educational services; or (b) renting of immovable property; Amending Notes w.e.f. 1.4.2013 - Exemption by way of auxiliary educational services and renting of immovable property by (and not to) specified educational institutes under S. No 9 will not be available; From 11.7.2014 - Notification No.06/2014 - Service Tax dated 11th July, 2014 9. Services provided,- (a) by an educational institution to its students, faculty and staff; (b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; Amending Notes w.e.f. 11.7.2014 - Rationalization of Exemptions : At present, all services provided by educational institutions [providing educational services specified in the negative list] to their students, faculty and staff are exempted [ section 66 D (l) of the Finance Act, 1994 ]; this will continue. However, in respect of services received by such educational institutions, presently, exemption is being operated through the concept of auxiliary educational services‟ [Sl.No.9]. Doubts have been raised and clarifications have been sought regarding the scope and meaning of auxiliary educational services‟. To bring clarity, it is proposed to omit the concept of auxiliary educational services‟ and specify in the notification, the services which will be exempt when received by the eligible educational institutions. Accordingly, the following services received by eligible educational institutions are exempted from service tax: (i) transportation of students, faculty and staff of the eligible educational institution; (ii) catering service including any mid-day meals scheme sponsored by the Government; (iii) security or cleaning or house-keeping services in such educational institution; (iv) services relating to admission to such institution or conduct of examination. Further, for the purposes of this exemption, educational institution‟ is being defined in the exemption notification 25/2012-ST as institutions providing educational services specified in the negative list. It may be noted that the scope of exemption remains the same as earlier in the case of services provided by eligible educational institutions; in the case of services received by the eligible educational institutions, exemption will be available only in respect of the services specified as above. Further as a rationalization measure, the exemption hitherto available to services provided by way of renting of immovable property to educational institutions stands withdrawn, with immediate effect. Meanings and Definitions: educational institution means an institution providing services specified in clause (l) of section 66D of the Finance Act,1994 (32 of 1994) .