The Kerala Authority of Advance Ruling (AAR) ruled that no GST payable on payment of examination fee on behalf of students to American Academy of Professional Coders (AAPC) as a pure agent.
The applicant, M/s. Cigma Medical Coding Private Ltd is engaged in providing training for students in medical coding. The medical coding examination is conducted and certified by the American Academy of Professional Coders (AAPC) having its headquarters in Salt Lake City, Utah, United States of America (USA).
The applicant also helps some of their students to pay the examination fees for the medical coding examination conducted by AAPC by arranging an online facility/platform for making payment without collecting any service charge. Students can also pay their examination fee directly to AAPC. The applicant provides this fee payment facility to interested students for easy payment of fees without any hardship to students since the e-payment of fees through conversion of Indian Rupee to Dollar may not be easy to students who are not familiar with online foreign currency transfer payment. Moreover, there is every chance for errors in depositing fees to the particular account head of the foreign recipient. Neither the student nor AAPC is paying any service charge to the applicant for such remittance for examination fees. The applicant is providing this free fee payment facility to all interested students, including those who are not attending the training program of the applicant.
The applicant has sought the advance ruling on the issues whether the payment made to the American Academy of Professional Coders (AAPC) as examination fee for students on behalf of some of the students of the applicant institute as a pure agent is service under GST and is there any tax liability for the same when the applicant is collecting the actual examination fee and remitting that amount to AAPC as such without taking any service charges either from students or from AAPC.
Yet another issue raised was whether the payment made to AAPC as examination fee on behalf of outside students as pure agent is service under GST and is there any tax liability for the same when the applicant is collecting the actual examination fee and remitting that amount to AAPC as such without taking any service charges either from students or from AAPC.
The coram of Joint Commissioner of Central Tax, Shiva Prasad, and Additional Commissioner of State Tax, Senil A.K.Rajan ruled that the collection and payment of examination fee to AAPC by the applicant on behalf of the students who are enrolled for training with the applicant is not liable to GST subject to fulfillment of the conditions stipulated under Rule 33 of CGST Rules 2017.
“The collection and payment of examination fee to AAPC by the applicant on behalf of outside students (who are not enrolled for training with the applicant) without collecting any service charge either from students or AAPC is not liable to GST,” the AAR ruled.
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