The Central Board of Indirect Taxes and Customs (CBIC) has clarified that GST exemption available to long duration programmes by Indian Institute of Management (IIM) till 30th January 2018. For the period from 31st January, degrees/ diploma awarded by IIMs under IIM Act, 2017 are exempted under GST as they would be treated as ‘educational institutions’.
The Goods and Services Tax Council, after its 31st meeting, had 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.
The Indian Institutes of Management are providing various long duration programs (one year or more) for which they award diploma/ degree certificate duly recommended by Board of Governors as per the power vested in them under the IIM Act, 2017.
The Board clarified that services provided by Indian Institutes of Management to their students- in all such long duration programs (one year or more) are exempt from levy of GST. As per information received from IIM Ahmedabad, Annexure 1 to this circular provides a sample list of programmes which are of long duration (one year or more), recognized by law and are exempt from GST.
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“For the period from 1st July 2017 to 30th January 2018, IIMs were not covered by the definition of educational institutions as given in notification No. 12/ 2017 Central Tax (Rate) dated 28.06.2017. Thus, they were not entitled to exemption under Sl. No. 66 of the said notification. However, there was a specific exemption to following three programs of IIMs under Sl. No. 67 of notification No. 12/2017- Central Tax (Rate): – (i) two-year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of the Common Admission Test (CAT) conducted by the Indian Institute of Management, (ii) fellow programme in Management, (iii)five years integrated programme in Management. Therefore, for the period from 1st July 2017 to 30th January 2018, GST exemption would be available only to three long duration programs specified above,” the circular said.
Indian Institutes of Management also provide various short duration/ short term programs for which they award participation certificate to the executives/ professionals as they are considered as “participants” of the said programmes.
“These participation certificates are not any qualification recognized by law. Such participants are also not considered as students of Indian Institutes of Management. Services provided by IIMs as an educational institution to such participants are not exempt from GST. Such short duration executive programs attract standard rate of GST @ 18% (CGST 9% + SGST 9%). As per information received from IIM Ahmedabad, Annexure 2 to this circular provides a sample list of programmes which are short duration executive development programs, available for participants other than students and are not exempt from GST,” it said.
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