GST leviable on training/coaching services, as it does not come under the definition of educational institution to claim GST exemption

The Kerala AAR has ruled that training and coaching services provided by entities like M/s Tutor Comp Info Tech Private Limited are subject to GST. These services do not qualify for exemption as they do not meet the definition of an 'educational institution' under the relevant notification. The training provided does not lead to legally recognised qualifications or form part of approved vocational education courses.

The AAR, Kerala in the matter of M/s Tutor Comp Info Tech Private Limited [Advance Ruling No. KER/ 143/2021 dated July 27, 2022] has ruled that training provided by a training service provider neither leads to grant of any qualification recognised by any law nor is part of an approved vocational education course. Held that, training services does not come under the definition of ‘educational institution’ to claim Goods and Services Tax (“GST”) exemption under Sl. No. 66 of the Notification No. 12/2017 Central Tax (Rate) dated June 28, 2017 (“the Services Exemption Notification”).

Facts

M/s Tutor Comp Info Tech Private Limited (“the Applicant”) is offering education services to individual students, institutions and Government through its own online platform. The students need to register on the Applicant’s website, then an academic coordinator is assigned to each student and thereafter customized study materials are prepared for each student. Further, the invoices are raised with the description "Tuition Fees”.

The Applicant further submitted that currently the main source of revenue for them is from providing services to overseas students, and hence the services of the Applicant constitute export of services. They were remitting Integrated Goods and Services Tax (“IGST”) and claiming refund of the same. The Applicant contended that the services provided by them to individual students is liable to NIL rate GST since it falls under Sl. No.66(a) of the Services Exemption Notification.

Issue

Whether the training services provided by the Applicant falls under Sl.No.66(a) of the Services Exemption Notification?

Held

The AAR, Kerala in Advance Ruling No. KER/ 143/2021held as under:

• Noted that,in order to qualify for exemption under Sl. No. 66(a) of the Services Exemption Notification, the Applicant should be an ‘educational institution’ as defined under clause (y) of Para 2 of the Services Exemption notification.
• Opined that, the Applicant is not a formal school, but an institution providing special training / coaching to students who are enrolled in formal schools for education up to higher secondary or equivalent.
• Observed that, the training provided by the Applicant neither leads to grant of any qualification recognised by any law for the time being in force nor is part of an approved vocational education course.
• Stated that, the services provided by the Applicant are appropriately classifiable under Heading 9992 - Group - 99929 - SAC - 999293 as commercial training and coaching services.
• Held that, the Applicant does not fall under the scope of ‘educational institution’ as defined in sub-clause (i) of clause (y) of Para 2 of the Services Exemption Notification. Hence, not exempted under S1. No. 66 of the Services Exemption Notification.

Relevant Provisions

Sl. No. 66 of the Services Exemption Notification