Our company makes student kits which enable activity based learning, the kits help students to understand concepts in science. We also train the teachers to explain the concepts using our activity kits and we also monitor the kids and the teachers performance and report the same to the principal. We charge for the kits as well as for the service(Training and monitoring).
My Queries:
1) are services chargable to service tax, if yes under what taxable service
2) is the kit subject to sales tax (APVAT/CST) 3) are there any benefits (like grants, subsidies,tax waivers etc.) for an educational company like ours.
26 June 2012
Dear Susheel, Studying the above case, it may be clarified that providing kits to students for improving knowledge in science can be termed as a "job work" for and on behalf of school for which a fee is charged.
Having putting it in job work, it can be brought under Business Auxilliary services. Now the job work done in education sector is exempted from service tax as per the notification no. 14/ 2004-ST dated 10.09.2004.
Hence, supplying kits for education of students/teachers are not chargable to service tax as per the aforesaid notification.
ii) Since some consideration is charged for the supply of kits and the property within the kits are transfered to the school immediately on transfer,hence, it is sale under sale of goods Act. Therefore, sales tax is payable on the sale.
iii) The provisions for the grants, subsidies, tax waivers etc., will be stated here after studing the latest provisions as i am not sure for the existance of current provisions regarding this.
I would also like to make it clear that we are not job workers. The schools choose kits that they require from the list supplied by us. We do not supply kits on behalf of the school rather we supply the kits to the schools and raise an invoice in the schools' name
CAclubindia
