No Service Tax on Permitting Students to use Factory Premises for their Research Work by collecting a Fee: CESTAT [Read Order]

Service Tax - GST - CESTAT - Taxscan

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the activity of permitting the students to use the factory premises for their research work as a part of their academic curriculum is not subject to Service Tax.

The appellants are service providers in the category of transport of goods by road, mandap keeper and engineering consultancy services, having centralized registration. The department alleged that they were collecting certain amounts from trainees/students who undertook project works in their institution for which service tax is leviable as the same amount to Commercial Training or Coaching services.

It was contended on behalf of the appellants that the levy under the said category is only when a person is providing commercial training or coaching for imparting skill or knowledge or lessons whereas in this case, he said coaching and training has not been provided and only a very limited access is given to the students who visited the company premises for their project work.

While concluding the matter in favour of the appellant, the Tribunal held that “the activity of permitting the students to use the factory premises for their research work as a part of their academic curriculum will not make the receipt of the appellant as consideration for services rendered under the category of ‘commercial training or coaching’ as the scope of the said service is specific and requires satisfaction of the ingredients contained in Section 65(105(zzc) read with Section 65(26) and Section 65(27). Further, it is not the case of the Department that the appellant is conducting any training programmes for the students and the only case of the Department is that the appellant is permitting the students to visit the plant and to do their own research.”

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