Service tax on admission commission from deemed university

This query is : Resolved

Jatin (Querist)
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08 February 2016 Respected Experts,

Please help

We are providing admission information to students take admission in courses conducted by NMIMS (Deemed University) through our Authorized Information Centre.

Deemed university give 25% commission to us on total fees

How service tax calculated
If we have received 2500 as admission commission from university on Rs. 10000

Thanks in advance
Jatin

TARUN ARORA

TARUN ARORA (Expert)
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08 February 2016 Dear Mr. Jatin,
If your educational institution provides any one of the following type of education
(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 vocational education course;
Then as per entry 9 of notification 25/2012 as amended by 06/2014 services in relation to admission are exempt.

Extracts of Bare Law
Entry 9 of Notification No 25/2012 as amended
“9. Services provided,-
(a) by an educational institution to its students, faculty and staff;
(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 Government;
(iii) security or cleaning or house-keeping services performed in such educational institution;
“educational institution” means an institution providing services specified in clause (l) of section 66D of the Finance Act,1994 (32 of 1994)
Clause (I) Sec 66D
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 vocational education course;

Jatin

Jatin (Querist)
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09 February 2016 Dear Tarun Ji,

Thank you very much for your reply.
Sir, our information centre not provide any education, only provide admission information to students in respect of various management courses of NMIMS (Deemed University)
Deemed university give to us admission commission to us for admission taken by students through our Information Centre.

you are again requested to please help me on following points:

How calculated Service Tax
If Rs. 2500 admission commission recd. from NMIMS on toal fees of Rs. 10000.00

Thanks & Regards,
Jatin

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TARUN ARORA

TARUN ARORA (Expert)
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09 February 2016 Dear Jatin,
If your client provides admission services to an educational institution then the service is exempt from tax.
In case admission services are provided to an institution which does not qualify as an educational institution as defined then the commission received would be chargeable to tax @ 14.5%.
In your case amount of Rs 2,500/- would be deemed to include both the service amount and service tax amount so on the basis of reverse calculation total tax payable would be Rs 316.60 {(2500*14.5)/114.5}.

Jatin

Jatin (Querist)
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09 February 2016 Dear Tarun Ji,

Thank you very much for your quick & informative reply.

Sir, one more question

We calculate service tax on receipt basis (When admission commission recd.)

Please advise me it is OK?

Thanks & Regards,
Jatin

TARUN ARORA

TARUN ARORA (Expert)
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09 February 2016 As per Rule 3 of Point of Taxation Rules

The point of taxation is

Case 1: When bill is issued within 30 days of completion of service

Earliest of the following two events
a) Issue of Invoice or
b) Receipt of payment

Case 2: When bill is not issued at all or is issued after 30 days of completion of service

Earliest of the following two events
a) Date of completion of service or
b) Receipt of payment

Jatin

Jatin (Querist)
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09 February 2016 Thanks Tarun Sir, clear my all doubts

Jatin