The Karnataka Appellate Authority of Advance Ruling (AAAR), while setting aside the ruling of the AAR ruled that Exemption on GST for Online Supply of educational material to educational institutions.
The appellant, Informatics Publishing Ltd. is in the business of supplying online journals. They own an online educational journal portal called J-Gate, which is a platform for various educational journals.
The appellant enters into contracts with publishers for listing their scholarly journal on J-Gate. The platform qualifies as the world’s largest database of scholarly journal articles. J-Gate includes full-text access to over 25000 journals.
J-Gate indexes and aggregates articles from the peer-reviewed scholarly journals in all discipline sets such as Physical science and Life Sciences, engineering and Technology, Health Sciences, Economics, Laws, Social Sciences, etc. required by higher education institutions. J-Gate platform indexes millions of articles from several thousand online journals of interest to educational institutions.
The journals are updated on a monthly or bimonthly or quarterly basis. Being the platform for various scholarly and scientific journals, many educational institutions subscribe to J-Gate to have access to hundreds and thousands of educational journals.
The appellant charges the subscribing institutions an annual subscription fee, depending on the disciplines from which the journals are required to be accessed.
The Appellant approached the Authority for Advance Ruling (AAR) seeking a ruling on the question Whether the supply of services in the nature of subscription to the J-Gate by the educational institutions is eligible for exemption from GST under Notification No.2/2018- Central Tax (Rate).
The AAR vide its order gave the ruling that The providing of access to the online content by the applicant to their users is not a transaction covered under sub-item (v) of item (b) of serial no.66 of Notification No.12/2017- Central Tax (Rate) dated June 28, 2017 as amended by Notification No.2/2018- Central Tax (Rate) dated January 25, 2018, but is a transaction covered under SAC 998431 and liable to tax at 9% CGST under the entry no. 22 of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 and at 9% under the KGST Act.
The Appellate Authority consisting of members D.P. Nagendra Kumar and M.S. Srikar set aside the order of the AAR and held that the supply of services in the nature of subscription to the J-Gate (an online educational journal portal) by the educational institutions is eligible for exemption from GST under sub-item (v) of item (b) of serial no.66 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 2/2018- Central Tax (Rate) dated January 25, 2018.
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