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TMI Blog2020 (9) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... 0th Standard. Therefore, such schools are already covered under the definition of Educational Institution , as provided under sub-clause (i) of clause (y) of Paragraph 2 of the said Notification No. 12/2017-Central Tax (Rate). It is found that schools are providing education to the students up to higher secondary standard and therefore fall under the definition of Educational Institution as defined vide clause (y) of Paragraph 2 of the said Notification. Whether the conditions mandated by entry 66 (b) (iv) of notification 12/2017-Central Tax as reproduced are fulfilled or not as far as the services relating to conduct of examination by, such institution; up to higher secondary? - HELD THAT:- It comes out that schools taking ASSET will use its results for its examination process and overall assessment of the students. The Schools uses ASSET for the purpose of assessment and diagnostic assessment of its students. ASSET uses multiple choice question to focus on measuring how well SKILLS and CONCEPTS have been understood by the students. The basic nature of ASSET service is an examination to be conducted by Education Institution (School) but outsourced to the Educational Initiatives (E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of its students. The detailed description is mentioned here in below: ASSET 2.2 ASSET stands for Assessment of Scholastic Skills Through Educational Testing. It is a scientifically designed, skill-based assessment Exam. Rather than testing rote learning, it uses multiple choice question to focus on measuring how well SKILLS and CONCEPTS have been understood by the students. The basis nature of ASSET service is an examination to be conducted by Education Institution (School) but outsourced to the Educational Initiatives (EI). The assessment generates examination reports for students, indicative of their progress and topics that require attention and improvement. ASSET is an educational assessment exam taken at school and it does not envisage any kind of coaching and/or training of teachers or administrators. ASSET exam is conducted without any pre/post teaching business relation with the school. The exam is conducted at school and schools, based on their internal policy, make ASSET a part of their evaluation system. They also give student wise appropriate weightage to ASSET score. 2.3 Salient Features of ASSET are as under: For student of classes 3-10 Core subject: Engli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the students of primary and secondary schools, educational institutions, state / central for the purpose of framing public policy in connection with education. These solutions are focused on improving the learning levels of the child in the private schools and government school system. 3. Accordingly, the applicant sought the Advance Ruling on the following, Whether the educational assessment examination (ASSET) with its variants) provided by the applicant to school/educational organization is exempted from payment of GST under Sr. No. 66(b)(iv) of the Not. No. 12/2017-CT (rate) dated 28.06.2017 and entry No. 69(b)(iv) of Not. No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 as well as equivalent SGST Notification. Applicant s Interpretation of Law/Taxation under GST Regime 4.1 The applicant has quoted Sections 95 to 106 of the CGST Act, 2017 and stated that the question on advance ruling put forward by him is in respect of determination of whether the liability to pay tax on any goods or services or both, and also the applicability of a notification issued under the provisions of the GST Act is covered under Section 97(b) and (e) and therefore the applicant satisfies the cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. 4.5 Term Educational Institution is defined in point No. 2 of the same Notification, it reads as under: y) educational institution means an institution providing services by way of,- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; (iii) education as a part of an approved vocational education course; 4.6 The applicant submitted that on perusal of the above mentioned Entry No. 66, it is observed that various specified services provided by/ to an educational institution are exempt. Service specified under Entry No. 66 are exempt only when the same are provided by/to an institution which qualifies the definition of an educational institution . 4.7 The applicant further submitted that the phrase relating to expands the scope of this entry to include such support services which has relation to conduct of the examination of students. 4.8 The applicant submitted that the service provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it has been held that such words widen and expand the scope, meaning and content of expressions. Further, applicant submitted that Hon ble Supreme Court in case of M/s. Doypack Systems (P) Ltd. Vs UOI 1988 (36) ELT 201 SC held that, The expression in relation to (so also pertaining to ), is a very broad expression, which pre-supposes another subject matter. These are words of comprehensiveness which might both have a direct significance as well as an indirect significance depending on the context. 7. The applicant has submitted Flyer No. 40 (Education Service) issued by the CBIC provides the clarification that the auxiliary services availed by the educational institutions are exempted. The relevant part of the Flyer is reproduced as under: Education is fundamental to the nation building process. Right to Education is now a fundamental right of every child in India. GST Law recognises this and provides exemption to educational institutions, providing education up to higher secondary school or equivalent, from the levy of GST. Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (as per Notification No.12/2017- Central Tax (Rate)). Auxiliary education services other than what is specified above would not be entitled to any exemption. The exemption also comes with a rider. Such services are exempt only for educational institutions providing services by way of education upto higher secondary or equivalent. (from pre-school to HSC). Thus if such auxiliary education services are provided to educational institutions providing degree or higher education, the same would not be exempt. For instance, the services of conducting admission tests for admission to colleges in case of educational institutions are providing qualification recognized by law for the time being in force shall not be liable to GST. 7.3 The applicant has submitted that under GST Tariff, Education Services are classified under heading 9992 as per Notification No. 11/2017-CT (rate) and are further sub-divided into six groups (as per Annexure to the same Notification) comprising of pre-primary, primary, secondary, higher, specialized and other educational support services. The same is classified herein below: S. No. Chapter, Section, Heading or Group Service Code (Tariff) Service Description 581 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices provided by the Applicant falls under the category of the education support services as it is providing educational testing evaluation/ education testing services. Further, they stated that services provided by the Applicant are used as modern technique by education institution for examination of students and it is similar to continuous and comprehensive Evaluation (CCE) as mandated by Right to Education Act of India in 2009; applicant service is similar to Continuous and Comprehensive Evaluation (CCE). This approach of assessment was introduced in India, as well as by the Central Board of Secondary Education (CBSE) in India for students of sixth to tenth grades and twelfth in some schools. 7.7 The applicant further submitted that main aim was to evaluate every aspect of the child during their presence at the school. This is believed to help reduce the pressure on the child during/before examinations as the student will have to sit for multiple test throughout the year, of which no test or the syllabus covered will be repeated at the end of the year, of which method is claimed to bring enormous changes from the traditional chalk and talk method of teaching, provided it is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ults are included in the overall evaluation system of the school. This is confirmed by the agreement cum application form for ASSET also. C. MINDSPARK :- Mindspark is a computer based online self-learning tool that enhances children s understanding of the concern subject. It adapts to each student s individual learning pace in sync with school curriculum and provides instant feedback that clears incorrect understanding. We are charging and paying GST @ 18% on the said services provided to the various clients except in a case where it qualifies the conditions of export of services. 9. Further, they submitted the following: 1. ASSET is optional for individual student or compulsory for whole class? Basic description of ASSET as narrated above and also in our earlier submission is that it is curated to give an overall evaluation of a student in different subjects, we have also clarified and it is also clear from clause 8 of the agreement given under our submissions that schools have to mandatorily include ASSET examination results in overall schools assessment system. It will serve no purpose if ASSET was made optional for students because if that be the case the school will not be abl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offering to Schools, we are offering ASSET Retail program online whereby we are providing old test papers of ASSET exams. Anybody can go online and buy such offering. As its not Exams conducted on behalf of Schools we are duly charging and paying GST @18% except the services qualifies for export of service and ready to continue with the same in future. 10. The applicant rely upon the following Orders of Authority of Advance Ruling: M/S. EDUTEST SOLUTIONS PRIVATE LIMITED, Gujarat AAR (2018 (10) TMI 201):- Where it is held that The expression relating to used in sub-item (iv) of item (b) of Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) widens the scope of the said entry and printing of question papers would be covered by the phrase services relating to admission to, or conduct of examination by, such institution in entry no. 66(b)(iv) of CGST Rate Notification 12/2017 r.w. entry no. 69(b)(iv) of IGST Rate Notification 10/2017. M/S. THE BANGALORE PRINTING AND PUBLISHING CO. LIMITED, Karnataka AAR (2019 (11) TMI 157):- Here it is held that, There may be several services relating to the conduct of examination like invigilation, distribution of question papers, collection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chool and it does not envisage any kind of coaching and/or training of teachers or administrators. ASSET exam is conducted without any pre/post teaching business relation with the school. The exam is conducted at school and schools, based on their internal policy, make ASSET a part of their evaluation system. They also give student wise appropriate weightage to ASSET score. 15. Applicant has further stated that ASSET is an examination tool for educational assessment of students in class 3-10 in schools across India and outside India; that, under ASSET, they provide a set of questions on various subjects which are set by them based on the class level, board (like state or CBSE or ICSE etc) and the methodology adapted by the school for teaching. 16. The applicant has been supplying the course viz. ASSET in two variants i.e. 1. Physical question paper and 2. Online question Paper to the students of class 3rd to 10th standard which contains multiple questions. The applicant makes contract with the Schools for supply of ASSET multiple questions of various subjects to their students. The basic nature of ASSET is an examination of multiple questions conducted by School and supplied by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Rate) reads, as below: (1) (2) (3) (4) (5) SI. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 66 Heading 9992 Services provided (a) by an educational institution to its students, faculty and staff; (aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee; (b) to an educational institution, by way of,- (i) transportation of students, faculty and staff; (ii) catering, including any midday meals scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; up to higher secondary : (v) supply of online educational journals or periodicals: Provided that nothing contained in sub-items (i), (ii) and (iii) of item (b) shall apply to an educational institution other than an institution providing services by way of preschool education and education up to higher secondary school or equivalent : Provided further that nothing contained in sub-item (v) of item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of claim of subject exemption. 21. It is now to be seen whether the conditions mandated by entry 66 (b) (iv) of notification 12/2017-Central Tax as reproduced are fulfilled or not as far as the services relating to conduct of examination by, such institution; up to higher secondary. We find from the submissions of the applicant that they are supplying ASSET multiple questions to the School for taking the examination on students on yearly basis. Sample agreement submitted by the applicant vide clause 8 stipulates as under: It is expressly agreed that test undertaken by school under ASSET FS/FC are mandatory part of the examination and evaluation of the students and ASSET results will be taken into account for overall assessment done by the school. If the need arises the school shall issue a certificate to EI in this regards 21.1 On reading the above, it comes out that schools taking ASSET will use its results for its examination process and overall assessment of the students. The Schools uses ASSET for the purpose of assessment and diagnostic assessment of its students. ASSET uses multiple choice question to focus on measuring how well SKILLS and CONCEPTS have been understood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy of GST. Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Other services related to education, not covered by the exemption, would be taxed at a standard rate of 18% with full admissibility of ITC for such taxable services in cases where the output service is not exempt. In a nutshell, every attempt is made to ensure that the core educational services are fully exempt from GST. 21.4 Therefore, we hold that services have been provided to the schools in relation to conduct of examination of students by such educational Institutes. We also take cognizance of case laws, CCE V/s Rajasthan State Chemical Works 1999(55) ELT 444 (SC); Union of India V/s Ahmedabad Electricity Co. Ltd. 2003(158) ELT 3(SC) and M/s. Doypack Systems (P) Ltd. Vs UOI 1988 (36) ELT 201, cited by the applicant, wherein Honorable Supreme Court, while interpreting the term relating to and in relation to , has assigned wide and broad view of the term. Therefore, we hold that second condition for availing the exemption has also been satisfied in the instant matter. 22. The applicant has also placed reliance on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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