9911796707
TMI Blog2008 (8) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... he remaining are managed through franchisees, who represent the Appellants and run the coaching centres at various places in India on the basis of the concepts of business operation and knowhow provided by the Appellants, on payment of certain fee to the Appellants. The main activity of the Appellants, however, is online computer education through the medium of internet i.e. through an interactive website. The main point of dispute is as to whether the activity of providing 'online computer training' is classifiable as 'commercial Training or Coaching' under Section 65 (27) of the Finance Act, 1994 and on this basis exempt from service tax under Notification No. 9/2003-ST dated 20/06/03, as claimed by the Appellant or this activity is classifiable under heading online information and data base access and/or retrieved service defined under Section 65 (75) of the Finance Act, and chargeable to service tax accordingly. The other point of dispute is with regard to the real time training/coaching centres managed through franchisees and the same is whether the franchise fee being received by the Appellants from their franchisees is liable to service tax under 'Franchise Service' as defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the service of Electronic Access to Securities Information (EASI), provided by Central Depository Services India Ltd. (CDSL) to its customers are not covered by 'online information and, data base access and/or retrieved services'. Therefore online computer training/courses through electronic medium would not be covered by 'online information and data basis, access and/or retrieved service'. (4) Providing online education has become feasible because of internet connectivity. Well established educational institutions are adopting this method to extend the scope of distance education. Indira Gandhi National Open University (IGNOU) has taken initiative in launching online educational computer programmes are 'The Bachelor of Information Technology' and 'Advanced Diploma in Information Technology' are offered through a virtual campus initiative. In addition to IGNOU, www.e-gurukul.com; www.vidyarthi.com, www.classteacher. com etc. are providing interactive educational programmes online. TRU in its circular No. B-11/1/01-TRU dated 9/1/01 has given the examples of paid websites like www.taxindiaonline.com, www.cllonline.com etc. as the paid websites covered by 'online information and da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, in relation to online information and database access or retrieval or both, in electronic from through computer network, in any manner. The scope of the words in relation to, as explained by Hon'ble Supreme Court in para 46 of its judgment in case of 'Tamilnadu Kalyam Mandapan vs. CCE, Chennai', reported in 2006 (3) STR 260 (S.C.) is very wide and therefore even online Information and database retrieval through an interactive website in connection with teaching purposes would be covered by this entry. For an activity to be covered under the entry online information and database access and/or retrieval, what is necessary is that information is provided online through computer network, even if the website is interactive. (2) There is no exclusion of interactive, access as the words in relation to in Section 65 (105) (Zh) are very wide. (3) Shri Rishi Sehdev, M.D. of the Appellant Company has accepted that as per his understanding the service of online computer courses being provided by his company is taxable and for this reason, in addition to basic charge, an amount equal to the service tax chargeable, was being collected from the customers, but the same was not being paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exact nature of the activity of conducting what the Appellants call online computer courses. 4.1 The Appellants provide courses/training in computer hardware and software and online computer courses involve teaching/coaching through an interactive website. The clients not only have to access to the lessons but they can also interact with experts and other students through e-mail and chat and besides this they can also give online test and get a certificate, if they pass the test. The online computer courses have all the features of traditional computer classes and only the difference is medium. The users can subscribe for online courses through a referrer, who is a person already using online education facilities of the appellants and the subscription for online computer courses is Rs. 6,000/- per subscriber, in which the subscriber gets unlimited education alongwith 35MB of Web space and online tools for a period of one year from the date of registration. 4.2 The competing entries for the above activity are online information and data access and/or retrieval service defined under Section 65 (75) of the Finance Act, 1994 and commercial training or coaching service as defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable service with regard to commercial or training centres has been defined as any service provided to any person by a commercial training or coaching centre in relation to commercial training or coaching. The definition of commercial training or coaching centre does not mention the media used for this purpose and in fact as per the Board Circular No. 59/8/2003 dated 20/6/03 even the correspondence courses are covered by this entry. 4.3 According to Revenue, the Appellant's activity of providing online computer courses is nothing but online information and data base retrieved access or retrieval service, even if the website through which the courses are conducted is interactive. On the other hand, the contention of the Appellants is that they are providing e-education service and that except for the medium there is no difference between the online computer courses and the traditional real time computer courses being provided by them. 4.4 The activity of providing online computer courses is not simply providing online access to data or information. What is being provided to the clients is online lessons on various topics in computer hardware and software and besides this, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the appellants are a Computer Training Institute engaged in organizing computer courses, they would be eligible for the benefit of service tax exemption under notification No. 9/03-ST dated 20 June 2003. 4.5 Next point to be decided as to whether in respect of real time computer courses i.e. the traditional computer courses, the activity of giving franchise to other persons for conducting computer courses for which the Appellants receive some consideration from the franchisees would attract service tax under entry franchise service or not. 4.5.1 During the period of dispute under Section 65 (47) the word Franchise had been defined as under - franchise means an agreement by which (i) franchisee is granted representational right to sell or manufacture goods or to provide service or undertake any process identified with franchisor, whether or not under a trade mark, service mark, trade name or logo or any such symbol, as the case may be, is involved, (ii) the franchisor provides concepts of business operation to franchisee, including knowhow, method of operation, managerial expertise, marketing technique or training and standards of quality control except passing on the ownership ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
