Service Provided by Educational Institution to its Students and Staff attracts NIL Rate of GST: AAR [Read Order]

The Maharashtra Authority of Advance Ruling ( AAR ) has held that service provided by Educational Institution to its students and staff attracts Nil rate of GST.

The applicant, M/s Rahul Ramchandran (Inspired Academy), engaged in the business of selling stationery, educational books etc. mainly to school students. This application is pertaining to their new business under the Trade name “Nashik Cambridge Pre-School”, with an intent to supply pre-school education service against fees, necessary goods to its students without any consideration, transportation service to its students and staff and canteen facility to its staff.

The applicant by relying the Notification No. 12/2017 submitted that educational institution is not subject to any condition such as certification by any Government Authority and any Act, that is “Educational Institution”. Therefore, applicant qualifies for payment of tax at Nil rate in respect of services supplies to its pre-school students and staff. The applicant further submitted that under entry 66 of Notification No. 12/2017, the supply of goods to pre-school students attracts Nil rate of tax if the supply is a ‘composite supply.

The Authority observed that the applicant provides services by way of pre-school education and as per 2(y)(i) of definition entry 66 of Notification No. 12/2017 the “Nashik Cambridge Pre-School”, can be considered as an ‘Educational Institution’. Since it is considered as an Educational Institution, services provided by it to its students and staff attracts Nil rate of GST.

The Coram of Mr. Rajiv Magoo (Central tax) and Mr. T. R. Ramnani (State tax) has held that “we therefore hold that, the service provided by the “Nashik Cambridge Pre-School” to its students, faculty and staff is covered under Sr.66 of Notification No. 12/2017. Furthermore, “Nashik Cambridge Pre-School” is also entitled to Nil rate of tax as per Sr. 66 of Notification No. 12/2017, on supply of pre-school educational services to its students against a fee; on supply of transportation services to its pre-school students without consideration; on supply of transportation services to its pre-school students for some consideration; on the supply of transportation supply to its faculty and staff for some consideration; on supply of some goods to its pre-school students without consideration and on supply of canteen service to its faculty and staff for some consideration”.

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