The Appellate Authority for Advance Ruling (AAAR), Telangana, has recently, held that the sub-contractors are not eligible for exemption under GST in the case of pre and post examination services educational institutions.
The aforesaid observation was made by the Authority when there was a controversy in the ruling of AAR among the members of authority. The applicant Magnetic Infotech Pvt Ltd, was engaged in providing pre and post examination services to various educational institutions, sought Advance Ruling in whether GST exemption was applicable to applicant when providing service of pre and post examination services to educational institutions and if this service come under the exemption whether the exemption was available to the applicant in case of the services provided on sub-contract basis.
The AAR ruled that the GST exemption was available to the applicant but a different opinion wasformedamong the membersas to whether GST exemption was available the applicant in case of the services provided on sub-contract basis. Later it was referred to AAAR.
TheAppellate Authority for Advance Ruling (AAAR), Telangana held that the subcontractors were not eligible for GST exemptions as the main contractor to whom the applicant had to provide services as subcontractor was not an educational institution.In other words, the exemption would be available only when the services are provided “to” an educational institution for services. Also held that even if the service was to educational institution, service on subcontract basis would be a service in between the main contractor and subcontractor .
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