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TMI Blog2020 (1) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... has passed order in the name of Emerald Heights School . The appellant has stated that the service provider here is an entity registered under section 12AA of Income Tax Act, 1961, the non- consideration of such status has led to vitiated interpretation (s) of exemption (s) by ARA (the correct word here is AAR instead of ARA) - The appellant school organised a Conference (Programme) for its students staff and students staff of other Schools to develop amongst the students the cultural understanding, sensitise them to the community they are visiting, forge friendships, carry out social service and develop mind, body and soul through a range of culturally immersive experiences including local expeditions, sporting activities, and mindful practices, most especially a daily programme of yoga. The fundamental reason of rejection of application by AAR was that Applicant himself being the school is not registered as a Charitable institution under Section 12AA of the Income Tax Act 1961 but as has been illustrated that The Emerald Heights International School is not the applicant. Applicant in this case, as is evident from the Application filed before AAR and Appeal filed before AAAR, is E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hya Pradesh Goods and Services Tax Act, 2017 [hereinafter also referred to as "the CGST Act and MPGST Act"] by Emerald Heights School Samiti (hereinafter also referred to as the "appellant") against the order of Authority for Advance Ruling No. 13/2019/AAR/R-28/28/2019 dated 20.08.2019. 3. BRIEF FACTS OF THE CASE 1. Emerald Heights School Samiti, the Appellant, has submitted that it is a registered Society (hereinafter referred as the "society") for the promotion of education and is registered under M.P. Societies Act, 1973 bearing registration No. 10981 dated 18.02.1982 and is also registered as a Charitable Institute under Section 12AA of the Income Tax Act, 1961 at 9/99-2000 dated 01.06.1999. Appellant has declared it as effective till date through its President. 2. Emerald Heights School Samiti owns and runs The Emerald Heights International School (hereinafter referred as "the School" or the Appellant) supported by their application for grant of recognition under RTE Act, 2009 signed by Emerald Heights School Samiti wherein they have declared the school's name as The Emerald Heights International School. Further according to the Appellant, the Society is not engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent (proposed agreement) for hosting and managing the conference/gathering. The proposed agreement clearly mentions that the school shall act as the host of the conference in its own right as principal and shall not be deemed to be acting as an agent of the association. 10. As per the proposed agreement, the Appellant is responsible to hold the conference engaging appropriately skilled, trained and experienced personnel and sufficient financial and material resources. This shall include planning the conference, inviting the participants, arranging the accommodation, food etc., organizing and managing the events in the conference etc. 11. Consideration for performing the above functions to cover the expenses of the conference would flow from the Round Square member schools (many of such member schools are based outside India) in the form of fee along with the list of Individual student and staff attendees to the Appellant. According to the Appellant no surplus is expected to be generated from the Conference. Surplus, if any, shall be transferred back to the Association. 4. QUESTIONS RAISED BEFORE AUTHORITY FOR ADVANCE RULING (AAR) Relevant questions which have been decided again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCE RULING (AAAR) The following questions have been posed before the Appellate Authority with reference to the activity undertaken by the Appellant: - A. Will the consideration received by the school from the participant school(s) for participation of their students and staff in the conference would be exempted under entry No. 66 or entry No. 1 or entry No. 80 or any other entry of the Notification No. 12/2017 - Central Tax (Rate) or will be chargeable to GST under CGST Act, 2017 & MPGST Act, 2017 or IGST Act, 2017? B. if not exempted then what would be the appropriate category of the service and the appropriate Tax Rate? C. Whether exemption provided to service providers of catering, security, cleaning, housekeeping, transportation etc. to an educational institution up to higher secondary be available to the Service Providers of the Appellant for services related to such conference. D. Whether ITC would be eligible of all the input services availed for the purpose of the above conference? 7. Submission of the Appellant (1 of 2) i. Emerald Heights School Samiti is a registered Society (hereinafter referred as "the Society") for the promotion of education and registered u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed as Annexure: C) vi. The appellant appeared before the Authority of Advance Ruling (AAR) and reiterated the submissions made in the application. vii. The AAR passed the order with the following rulings: A. The consideration received by the school from the participants schools for participation of their students and staff in the impugned conference would not be exempted under entry 66 or entry no. 1 or entry no. 80 or any other entry of the Notification No. 12/2017-CT(R). B. The authority is of opinion that various services provided for organizing the impugned Conference / gathering of students and staff of other Schools, shall be liable to tax at the rate applicable to the respective services. C. To decide the place of supply is beyond the jurisdiction of AAR. D. Authority is of the opinion that Exemption provided to service providers of catering, security, cleaning, house-keeping, transportation etc. to an educational institution up to higher secondary shall not be available for services provided for the impugned conference for which the applicant has asked for ruling. E. On the fifth question raised by the applicant, the authority is of opinion that the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid notification has been reproduced below for reference and discussion. Entry 66 of the Notification No.12/2017-Central Tax (Rate) "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; Provided….." Clause 2(y) of the Notification No. 12/2017- Central Tax (Rate) "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 recognised by any law for the time being in force; (iii) education as a part of an approved vocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the services get covered under the exemption under entry no. 66. In the second part of the exemption, the only criteria is that the service recipient should be an educational institution and the service provider should have been providing services by way of - First: transportation of student, faculty and staff, Second: Catering, Third: Security, cleaning and house-keeping services performed in such educational institution. We wish to invite your attention to the fact that the above exemptions squarely applies to the Appellant because Appellant is an educational institution providing upto secondary education. Therefore, any services of transportation of students, faculty or staff received by the Appellant merit exemption under clause (b)(i) under entry 66; any service of catering received by the Appellant merit exemption under clause (b)(ii) of entry 66; any service of security or cleaning or house-keeping performed in the premises of the Appellant merit exemption under clause (b)(iii) of the entry 66. We wish to highlight that the exemption for the service received by the Appellant under clause (b) of the entry 66 are plainly available to the Appellant because there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through a range of culturally immersive experiences including sporting activities, mindful practices, and most specially a daily programme of yoga. It is submitted that though the different sessions in the conference vary in their contents, the overall structure of the conference reflects that the training to the participants during the seven days in a composite form may be best defined as training in recreational activities relating to Arts and Culture and Sports. B.3 It is relevant to highlight here that even the services provided by an entity registered under Section 12AA of the Income Tax Act, 1961 by way of Charitable Activities are exempt under the Law while entry 1 of the Notification No. 12/2017-CT(R). Under this entry charitable activities have been defined to include the activities relating to advancement of religion, spirituality or yoga. In the context of the services in question we wish to categorically place before you that the conference included daily sessions on yoga also. Therefore, although the nature of services provided by the Appellant needs to be classified under one single service head and the exemption needs to be claimed under one single exemption entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly a daily programme of yoga. 2. The fundamental objection of the appellant is that the Applicant before the Authority of Advance Ruling was "Emerald Heights School Samiti" whereas the AAR has passed order in the name of "Emerald Heights School". The appellant has stated that the service provider here is an entity registered under section 12AA of Income Tax Act, 1961, the non- consideration of such status has led to vitiated interpretation (s) of exemption (s) by ARA (the correct word here is AAR instead of ARA). 3. The application made by appellant before AAR was called which clearly shows that the application was made by "Emerald Heights School (Run and Owned by Emerald Heights School Samiti". The applicant has declared by signing the application to AAR that he is applicant and he owns and runs a school. It is not the job of AAR or AAAR to investigate it. The AAR or AAAR are not fact-finding authorities. Section 104 of GST Act is as under: - Sec. 104: Advance ruling to be void in certain circumstances (1) Where the Authority or the Appellate Authority finds that advance ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of section 101 has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. This "Samiti" is registered as a Charitable institution under Section 12AA of the Income Tax Act' 1961. 7. It is quite common that Charitable Institutions own and run educational institutions and the benefits of GST accrue to these institutions. This had been the concept and practice during Service Tax Regime. The same has been duly explained by CBIC in its "e-version of GST Flyers at chapter number 39 of 51 chapters. 8. Entry no 80 of notification no. 12 Central (rate) dated 28.06.2017 is as under : - Services by way of training or coaching in recreational activities relating to - (a) Arts or culture or (b) Sports by charitable entities Registered under section 12AA of the Income Tax Act. 9. Column 3 of schedule provides tax rate as NIL and in Column 4 which provides "condition", there is no condition to avail of the benefit. 10. The object of the conference is given as: "The purpose was to enhance creativity while ensuring the individual development of every pupil including academic, Physical, cultural and spiritual aspects in a global perspective and also to develop their cultural understanding, debate topical issues that sensitise them to the community they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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