Any Institute issuing any Educational qualification which is Recognised by law are Exempted from Service Tax: CESTAT [Read Order]

The Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that any institution issuing any educational qualification that was recognized by law is exempted from the service tax. 

School of Information Technology, the appellant assessee was an institution located in Varanasi which was appointed by the PTU and the Punjab Technical University, Jalandhar, Punjab (a University established by an Act of the State Legislature of Punjab), had appointed Master Companies/ Regional Learning Facilitation Centers across the county, for their Distance Education Courses. 

The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand of Service Tax amounting to Rs 67,448.00 including education cess and higher secondary education cess, should not be demanded and recovered from them under the provisions of the proviso to section 73 (1) of Chapter V of the Finance Act, 1994. 

Vijay Kapoor, the counsel for the assessee contended that the degree provided by the Punjab Technical University was recognized by the law and hence the deletion of the phrase in the Finance Act,1994 will not have any impact on findings recorded by us to the effect that the before introduction of Negative List, the services provided by the assessee are not covered by the definition of Commercial Training or Coaching Services. 

Santhosh Kumar, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand raised by the revenue was as per the law and liable to be sustained. 

The Bench observed that the post introduction of the Negative list of services concept for taxation of services by Finance Act, 2012, it observed that the services of the assessee are covered under the negative list, and hence cannot be subject to tax. 

The two-member bench comprising P K Choudhary (Judicial) and Sanjiv Srivastava (Technical) held that conduct of degree courses by colleges, universities, or institutions which lead to the grant of qualifications recognized by law would be covered in the negative list and are exempted from service tax. 

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