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TMI Blog2021 (7) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... ning services in relation to medical coding program to the students enrolled with them to appear in the examination conducted by the AAPC. The applicant is collecting fees for such training provided by them and is discharging GST at the rate of 18% on the fees collected. They are collecting the amount required to be paid as exam fees from the students in addition to their training fees and making payment of the exam fee amount through the online facility to AAPC. The applicant is not collecting any service charge for providing the facility for payment of exam fee either from the students or from AAPC - In the second situation the applicant is providing the same online facilities for payment of fees to students who are appearing for the examination conducted by the AAPC but are not enrolled with them for training. The facility of payment of fees through online platform is extended to interested students who approach them. The examination fees is paid by the applicant to AAPC for the examination and certification services provided by the AAPC to the students in addition to the training and fee payment facilitation service provided to the students by the applicant. Therefore, all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax liability for the same, when the applicant is collecting the actual examination fee and remitting that amount to AAPC as such without taking any service charges either from students or from AAPC. 2. Whether the payment made to AAPC as examination fee on behalf of outside students as pure agent is service under GST and is there any tax liability for the same, when the applicant is collecting the actual examination fee and remitting that amount to AAPC as such without taking any service charges either from students or from AAPC. 3. Whether the applicant may follow, the essence of the Karnataka Advance Ruling in M/s. Arivu Educational Consultants Pvt. Ltd. (Advance Ruling Order No.KAR-ADRG-116/2019) that such payment of examination fee is not a service chargeable to tax under GST laws. 4. Contentions of the Applicant: 4.1. The applicant submits that they are engaged in providing training for students in medical coding. The AAPC was founded in 1988, as the American Academy of Professional Coders, with the aim of providing education and certification to coders working in physician-based settings. This coding examination is well known in the world by the name AA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. In the first case the applicant acts as a pure agent and hence there is no tax liability for the services of collecting the examination fee from the students and remitting the same to AAPC on behalf of students of the applicant as there is no value addition to the services. 5.2. In the second situation the applicant will not get the benefit of pure agent, even though no service charges are collected from outside students, as the condition in sub-rule (iii) of Rule 33 specifies that the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. In the case of outside students, the applicant is not providing any service on their own account. Hence, they are not eligible for the exemption claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. Explanation :- For the purposes of this rule, the expression pure agent means a person who,- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. 7.3. On the basis of the above provisions, the two situations are to be examined to determine whether the amount of examination fee collected and paid by the applicant to AAPC satisfy the requirement of Rule 33 of the CGST Rules, 2017 so as to be excluded from the value of taxable supply provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied. 7.7. In the second situation, the students are not enrolled with the applicant for training but have approached the applicant for facilitating payment of fees to AAPC for procuring the examination and certification services provided by AAPC. The applicant collects the actual amount of examination fee and remits that amount to AAPC on behalf of the student without collecting any service charges either from the student or from AAPC. In this situation the applicant collects the examination fee from the students and remits it to AAPC and no service charge is collected for the fee payment facilitation service either from the student or AAPC. In order to come within the scope and meaning of supply as defined in Section 7 of the CGST Act the activity / transaction shall be for a consideration in the course or furtherance of business. Though the fee payment facilitation services are provided by the applicant in the course or furtherance of their business as the same is being made without consideration it falls outside the meaning and scope of supply as defined in Section 7 of the CGST Act, 2017. Therefore, the applicant is not liable to pay GST on the fee payment facilitation ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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