Sale of Study Materials by Coaching Centres would not attract Service Tax: CESTAT [Read Order]

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The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad bench has observed that the sale of study materials by a registered coaching centre would not attract service tax as the same had already been subjected to VAT.

The appellant, a service provider and engaged in the selling of Healthcare, Lifestyle, Homecare, Personal care products through network marketing, also engaged in the selling of study material on behalf of several companies.

The department noted that the appellants are engaged in providing IT Education through these up-front companies i.e. M/s APLL. Therefore, it was alleged that all the educational services have been provided by the appellant through their companies the study material has been sold by the appellant is nothing lest it is as the gamut of the appellant to avoid payment of service tax on the sale of study material related to IT Education services. Accordingly, they demanded service tax on the amount of sale of study material by the appellant on behalf of the companies under the category of ‘Commercial Coaching or Training Services’ by invoking the extended period of limitation.

The bench noted that the coaching centres are registered coaching centre and provide services to their students. The coaching centres are also private limited companies and having separate identity known by the Registrar of Companies.

“We further take note on the fact that appellant is engaged in only selling of study material to the students of these coaching centres and paying VAT on sale of these study material. Therefore, in the light of the decision of this Tribunal in the case of M/s Chate Coaching Classes Pvt. Ltd. (Supra), the amount collected by the appellant by selling of study material is not taxable service under the Finance Act, 1944. The case of the Revenue is that the coaching centres are up front companies of the appellant is not acceptable that these coaching centres are independently providing coaching services to their students and on the fees collected by them, they are paying service tax. In that circumstances, it cannot be said that these coaching centres or up front companies of the appellant and the appellant is liable to pay service tax on the payment of sale of study material. Therefore, we hold that the whole case of the Revenue is without basis.”

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