The Goods and Services Tax ( GST ) Council, after its 31st meeting, has recommended clarifying that with effect from 31st January 2018 degrees/ diploma awarded by IIMs under IIM Act, 2017 will be exempted under the new tax regime.
Earlier, the Advance Ruling Authority of West Bengal has passed a similar order granting the IIM Kolkata the status of an ‘educational institution’ for the purpose of GST exemption under Notification No. 12/2017 Central Tax (Rate).
The issue was, whether the Indian Institute of Management after the enactment of the IIM Act w.e.f 31.01.2018 shall be treated as an ‘educational institution’ for availing the benefit of the above notification.
As per the Act, the IIMs are eligible to grant degrees, diplomas and other academic distinctions or titles and to institute and award fellowships, scholarships, prizes and medals, honorary awards and other distinctions in terms of section 7(f).
The AAR ruled in favor of the Institute and held that they qualify as an ‘educational institution’ as defined under clause 2(y) of the Notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 and is eligible for exemption under entry no. 66(a) of the Exemption Notification.
Now, with the clarification of the Council, the issue became final. A circular by the Central Board of Indirect Taxes and Customs (CBIC) in this regard can be expected soon.
