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TMI Blog2022 (4) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial component of education as it is one of the major means to assess and evaluate the skills of a candidate and the knowledge, be it a school test, university examination, professional entrance examination or any other examination. When the appellate authority says that the schools are not conducting the ASSET, or rather, the schools are facilitating the writ-applicant to conduct the ASSET, for which the schools get some remuneration towards the administration cost, it is thereby trying to erroneously convey that instead of the writ-applicant providing services to the schools, the schools are providing services to the writ-applicant, for which the schools receive administration cost - Indisputably, the question papers are set by the writ-applicant and the answers given by the students are assessed by the writ-applicant and the result of the ASSET is also prepared by the writ-applicant. The basic nature of the ASSET service is an examination to be conducted by the Educational Institution (School) but outsourced to the Educational Initiatives (EI). The observations made by the AAR in para 21.1 of its order clinches the issue. It is now well-settled that even in tax statutes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to school/educational organization in relation to ASSET examinations for nonpayment of GST; (d) Ad-interim relief in terms of prayer C above; (e) costs of the petition be provided for; (f) for such further and other reliefs, as this Hon ble Court may deem fit and proper in the nature and circumstances of the case may require. 2. The facts giving rise to this writ-application may be summarised as under : 2(1) The writ-applicant is a private limited company registered under the provisions of the Companies Act, 1956 (for short, the Act 1956 ). The company has been registered under the Goods and Services Tax Act, 2017 (for short, the Act 2017 ). The company deals in the products and solutions mainly intended to be used by the K-12 education segment, i.e. the primary and secondary schools for the assessment and learning. The company has been working with the private schools, public schools and organizations like the World Bank, Google, Azim Premji Foundation, etc. and has undertaken large scale assessment projects with various State Governments. 2(2) The writ-applicant filed an application under Section 97 of the CGST Act, 2017 and Section 96 of the GGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices Rate (per cent.) Condition (1) (2) (3) (4) (5) 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 mid-day meals scheme sponsored by the Central Government, State Government or Union territory; (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; [* * *]; (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 pre-school education an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the applicant that the department has made submissions on the basis of the website content. It has been contended that the web contents are designed on the marketing front whereas the actual activity needs to be assessed in terms of the agreement entered into with the schools. However, the applicant has specifically not controverted any submission made by the appellant department or it has not been submitted which part of their website content is at variance with the actual activity carried out by them in relation to conduct of ASSET. 11.2 The applicant has submitted that ASSET is used by the schools registered with them to evaluate the performance of students for giving internal marks, which bears 20% weightage in the standard X Board Examination. The moot question is whether the ASSET can be said to be conducted by schools, even if it is used to evaluate the performance of students for giving internal marks by the schools. The answer to this is obviously no. Furthermore, the applicant has not submitted whether the ASSET is conducted as substitute for any regular/periodic examination to be conducted by the schools. There is also no submission by the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... schools. Therefore, schools may enter into agreement with the applicant with a condition that all students in a class would take ASSET. The condition of the agreement only leads to a conclusion that unless the school agrees to take ASSET for all the students in a class, the applicant would not enter into a contract with that school to conduct ASSET. However, such condition in an agreement cannot change the nature of ASSET and it will not make ASSET an examination conducted by the schools. 11.5 A reference has also been made to a Flyer issued by the Central Board of Excise Customs (CBEC, now Central Board of Indirect Taxes Customs CBIC). In the said Flyer , it has been interalia mentioned as follows Taxing the Education Sector has always been a sensitive issue, as education is seen more as a social activity than a business one. The Government has a constitutional obligation to provide free and compulsory elementary education to every child. Thus, to promote education, it would be beneficial if educational services are exempted from tax. However, commercialisation of education is also a reality. The distinction between core and ancillary education is blurring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ASSET (Assessment of Scholastic Skills through Educational Testing with its variants) conducted by M/s. Educational Initiative Private Limited is not covered within Entry at Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended and corresponding Entry of Notification No. 12/2017-State Tax (Rate) dated 30.06.2017, as amended and hence not exempted from payment of Goods and Services Tax. 3. Being dissatisfied with the aforesaid order passed by the Gujarat Appellate Authority for Advance Ruling, the writapplicant is here before this Court with the present writapplication. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 4. Mr.J.K.Mittal, the learned senior counsel assisted by Mr.Hardik Modh, the learned counsel appearing for the writapplicant, vehemently submitted that the impugned order passed by the Gujarat Appellate Authority for Advance Ruling is erroneous in law. The principal argument of the learned senior counsel is that the appellate authority erroneously interpreted the relevant entry of the exemption notification, i.e. Entry No.66(b)(iv) of the Notification No.12/2017-Central Tax (Rate) dated 28th June 2017 referred to ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Auxiliary services received by such educational institutions for the purpose of education upto Higher Secondary levy is also exempt from GST. 10. In the CBIC Circular No.151/07/2021-GST dated 17.06.2021, in para 4, it has also clarified that : GST is also exempt on input services relating to admission to, or conduct of examination, such as online testing service, result publication, printing of notification for examination, admit card and questions papers etc, when provided to such Boards. [under S. No.66(b)(iv) of notifi No. 12/2017-CT(R)]. 11. In such circumstances referred to above, the learned senior counsel prays that there being merit in his writ-application, the same be allowed and the impugned order passed by the appellate authority be quashed and set-aside. SUBMISSIONS ON BEHALF OF THE REVENUE : 12. Mr.Priyank Lodha, the learned standing counsel, on the other hand, has vehemently opposed the present writapplication. Mr.Lodha would submit that no error, not to speak of any error of law, could be said to have been committed by the appellate authority in passing the impugned order. According to Mr.Lodha, the appellate authority could be said to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hooling. 18. We are of the view that the word education cannot be given a natural meaning by restricting it to the actual imparting of education to the students but should be given a wider meaning which would take within its sweep all the matters relating to imparting and controlling education. Examination is an essential component of education as it is one of the major means to assess and evaluate the skills of a candidate and the knowledge, be it a school test, university examination, professional entrance examination or any other examination. As held by the Supreme Court, the examination is considered as a common tool around which the entire education system revolves. In State of Tamil Nadu vs. K.Shyam Sunder (2011) 8 SCC 737, the Supreme Court held thus : 21. There has been a campaign that right to education under Article 21-A of our Constitution be read in conformity with Articles 14 and 15 of the Constitution and there must be no discrimination in quality of education. Thus, a common syllabus and a common curriculum is required. The right of a child should not be restricted only to free and compulsory education, but should be extended to have quality education witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edback/Detailed examination Reports on real learning; - Allows students to know they stand and pinpoints areas of strengths and weaknesses; - Allows schools to benchmark themselves against the best and identify areas requiring improvement; - Provides teachers with insights into where exactly their students stand compared to the national average or another section or school ASSESSMENT OF SCHOLASTIC SKILLS THROUGH EDUCATIONAL TESTING (ASSET) : - The ASSET is an examination tool for educational assessment of students of class 3-10 in schools across India and outside India. - Under the ASSET, a set of questions is provided on various subjects which are set based on the class level, board (like State or CBSE or ICSE, etc) and the methodology adapted by the school for teaching. These set of questions are either provided in hard copy or also through online mode. - Under the ASSET, no any pre or post exam teaching is provided to the students. Once the class takes the test under the ASSET, then the answers are evaluated and student wise and class wise results are provided. The exam is conducted at school, and based on their internal policy, all schools make the ASSET ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le question paper. Accordingly, we hold that the first condition has been fulfilled in respect 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 studen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Initiatives (EI). The observations made by the AAR in para 21.1 of its order clinches the issue. 25. It is now well-settled that even in tax statutes, an exemption provision should be liberally construed in accordance with the object sought to be achieved if such provision is to grant incentive for promoting education or otherwise has some beneficial reason behind it. The exemption notification should be given a literal meaning. The recourse to other principles or canons of interpretation of statute should be resorted to only in the event the same give rise to anomaly or absurdity. As observed earlier, the exemption notification must be construed having regard to the purpose and object it seeks to achieve. The notification in the case on hand should be read as a whole. 26. We are of the view that there need not be any further debate on the question, whether the services provided by the writ-applicant to the schools, which are educational institutions, fall within the meaning of the aforesaid notifications. The services, definitely, in our view, fall within the two notifications referred to above. 27. In the overall view of the matter, we are convinced that the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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