The Karnataka Authority for Advance Rulings (AAR) has ruled that a society that only supply textbook for students cannot be considered an educational institution or state government.
The Applicant states that they are proposing to submit a bid in response to the tender floated by the Karnataka Textbook Society (KTBS) for the printing of school textbooks as prescribed by the Karnataka State Board.
The Applicant, Karnataka Text Book Society is a Society registered under the Karnataka Societies Act, 1960 which was established vide Government Order ED 95 DGO 2005, Bangalore, dated 04-01-2006, promulgated to form an umbrella body in the context of preparation, printing and distribution activities of all Government approved school textbooks.
It was observed that KTBS was not an institution providing services by way of preschool or higher secondary education or education as a part of the curriculum or as a part of approved vocational education course, but it was a society which supplies textbooks to students and it cannot be classified as “educational institution”. As KTBS was a Society registered under the Karnataka Societies Act, 1960, the same cannot be considered as a “State Government”.
Dr M.P. Ravi Prasad, Additional Commissioner of Commercial Taxes Member (State) and Sri. T. Kiran Reddy, Additional Commissioner of Customs & Indirect Taxes Member (Central) observed that the applicant was into the printing of the content supplied by the recipient of the supply and such supplies would constitute the supply of service falling under heading 9989 of the Scheme of classification of services.
The authority held the above-said service as taxable vide Entry No. 27 of Notification No. 11/2017-Central Tax (Rate) and is taxable @ 18% as per entry No. 27 of Notification No. 11/2017-Central Tax (Rate) dated: 28.06.2017. The applicant was represented by Sankari V. Krishnan.
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