No GST applicable on School Bus Services for Students and Staff: AAR [Read Order]

The Tamilnadu Authority for Advance Ruling (AAR) recently ruled that no Goods and Services Tax is applicable on school bus services provided for students and staff.

The applicant is proposed to provide pick-up and drop (transport) service only to the students and staff of schools and not for the general public.

The applicant Muniyasamy Abhinaya sought advance ruling in the following issues raised before the authority: –

1. Whether GST is applicable for the activity proposed to be undertaken by the applicant by way of transport of staff and students of school as school bus operator, by school bus/van?

2. If GST is applicable, what is the percentage of GST to be charged to parents and school for arranging their staff to pick up and drop?

The applicant has registered as an unregistered applicant in GST portal on filing advance ruling application under the category of service provider, The Applicant had enclosed a letter wherein she had stated that she was approached by few schools in Chennai to provide transport service i.e. pick up and drop of their school children; This transport service will be operated by providing school bus/ van service only to the students studying in respective schools and not for general public.

It was also stated that payment of fees will be collected directly from the parents of the students as per advice and agreement with school. The applicant further stated that the teachers and  staff will also be picked and dropped en-route for which the school will pay. Further the bus/ van permits will be in the name of the respective school only.

The Authority Bench of D Jayapriya, CGST Member and SGST Member N Usha observed that, “The Applicant proposes to provide the service of picking up and dropping of school children and staff of higher secondary school in bus and/or by van by entering into an agreement with the schools. Further the bus and van permits will be in the name of respective schools. Thus, the Applicant's proposed activity of providing transport services to the education institutions by way of transportation of students and staff, will become eligible for exemption vide sl.no.66(b) of the Notification No. 12/2017-Central Tax (rate) dated 28.06.2017, if the services provided by the Applicant is to an educational institution as defined in Para No. 2(y) of the said notification and necessary permit has been obtained as mandated under the Tamil Nadu Motor Vehicles (Regulation and Control of School Buses) Special Rules, 2012.”

It was thus ruled that, “The activity proposed to be undertaken by the Applicant as specified in their application relating to the educational institution as defined in the Act amounts to supply of service and is exempted from GST under Sl.No.66(b) of Notification No. 12/2017-Central Tax (rate) dated 28.06.2017 read with para 2(y) (Definition) of Notification No. 12/2017-Central Tax (rate) dated 28.06.2017.”

To Read the full text of the Order CLICK HERE

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