The Authority for Advance Rulings (AAR), Karnataka has held that the service of providing Degree courses under related curriculums by educational institutions to students exempt from the liability to pay Goods and Services Tax (GST).
“The services provided by the applicant in affiliation to specified universities and providing degree courses to students under related curriculums to its students exempt from Central Goods and Services Tax vide entry no. 66 of the Notification No. 12/ 2017 – Central Tax (Rate) dated 28.06.2017 subject to the condition that such education services provided must be as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force,” the AAR said while considering an application filed by M/s Emerge Vocational Skills Private Ltd.
The applicant is a private limited company engaged in providing specified educational services in the field of Hotel management. They proposes to obtain an affiliation with a University in the State of Karnataka and shall thereafter be engaged in provision of education in affiliation with the said university in the State of Karnataka.
They contended before the AAR that they are getting the institution affiliated to a University in the State of Karnataka and is also proposing to impart education as a part of a curriculum provided by the University and the examination would be conducted by the University and qualifications which are recognized by law would be issued to the successful candidates. Hence the institution would qualify as an “educational institution” for the purposes of such courses only which lead to a qualification recognised by any law for the time being in force.
The authority noted that the applicant is not imparting pre-school education or education up to higher secondary school or equivalent and hence is not covered under clause (i) above. Further he is also not imparting education as a part of an approved vocational education course and hence cannot be treated as “education as a part of an approved vocational education course” as per Notification No. 12/ 2017.
The Authority held that “Since the “Services provided by an educational institution to its students, faculty and staff” is exempt from tax under the Central Goods and Services Tax Act and the applicant qualifies as an educational institution in so far as those courses for which affiliation has been obtained from the University in the State of Karnataka and for which University Curriculum is prescribed and the qualifications recognized by the law for the time being in force is given after the conduct of examinations by such University, the applicant is exempted from Goods and Services Tax. Similar notification is also present in the Karnataka Goods and Services Tax Act and hence the exemption is applicable mutatis mutandis under the Karnataka Goods and Services Tax Act also.”
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