No Service Tax leviable on Commercial Coaching or Training Services: CESTAT [Read Order]

service tax - Commercial Coaching - Training Services - CESTAT - Taxscan

The Allahabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that no service tax is leviable on Commercial Coaching or Training Services.

The appellants, Asian School of Media Studies (ASMS) and Asian School of Communication (ASC) and also Asian Business School (ABS) all under the same management are conducting professional/ vocational training courses and providing certificates to the students, on the basis of which the students are getting jobs or are trained to work as an entrepreneur / self-employed.

CA Abhinav Kalra appearing for the appellant has raised the issue of whether the appellants herein are liable to pay service tax under the head ‘Commercial Coaching or Training Services’ during the period of dispute April 2009 to 2015-16 (upto March 2016). The demands have been confirmed by a common adjudication order by the Commissioner, Central Goods & Service Tax, Noida.

The coram of Judicial Member Anil Choudhary and Technical Member, P. Anjani Kumar relied on Trichy Institute of Management Studies vs. CCE (Chennai Bench) wherein the Tribunal took notice that the Institution is run like a parallel College and the students are obtaining Degree from the Allagappa University under Distance Education Programme under MoU. This Tribunal relied on the ruling of the Kerala High Court in the case Malappuram Distt. Parallel College Assn., where the High Court had declared levy of service tax on parallel Colleges as arbitrary and violative of Article 14 of the Constitution of India. The Hon’ble High Court further observed that the levy of service tax on the education and training provided by parallel colleges indirectly falls on the students, which is discriminatory.

The Tribunal also took notice that the definition of ‘Commercial Training or Coaching Centre’ under Section 65(27) of the Finance Act contains an exclusion clause excluding – pre-school coaching and training centre or any institute or establishment which issues any certificate or Diploma/ Degree or any educational qualification recognised by law for the time being in force. This Tribunal recorded a finding that the appellant/applicant is an authorised study centre under an MoU entered with the University, on the basis of ‘Distance Education Centre (DEC) guidelines issued under the IGNOU Act, 1985. Accordingly, it was held that the appellant/ applicant is exempted from Service Tax, even without the benefit of Notification No. 10/2003- ST.

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