Supply of Manpower Services to Educational Institutions are exempted from Service Tax: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the supply of manpower service to educational institutions is exempted from service tax. The Tribunal held that the respondent is eligible for exemption from payment of Service Tax for the supply of manpower to educational institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012. 

M/s M.J. Solanki ( Partnership Firm ) is engaged in providing taxable services such as Cleaning Services and Manpower Recruitment or Supply Agency Services etc. Information received by the DGGI indicated that respondents have provided the taxable services but had not paid the appropriate amount of Service tax on taxable services provided by them. Acting on the intelligence, an inquiry was initiated against the respondent.

Accordingly, a search was carried out at their registered office and documents/ records relevant to the inquiry available at the said premises were withdrawn under Panchnama. The statement of Shri Anil J Solanki, the partner was recorded. Investigation of such documents withdrawn and subsequently details provided by the assessee viz, agreement/contracts/works orders/ invoices/ ledger and statement of Shri Anil Solanki, partner revealed that the Respondent is engaged in providing the services of Manpower Supply, cleaning and Housekeeping, Security, Rent-a-cab etc, to their various clients which includes hospitals, medical colleges, educational institutes, local authorities viz. Collector offices, municipal corporations, public health centres, block health centres etc; banks, public sector undertakings, educational institutions, research institutions, western railways, districts courts; etc. 

He also submitted that the adjudicating authority has further allowed the exemption from payment of Service tax on the income arising from the supply of 3 & 4 staff/ drivers to Dr Baba Sahib Ambedkar Open University, Ahmedabad and Paramedical staff supplied to training school, industrial training institutes etc. under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012, as amended. However as per the said provisions of the Notification supra, up to 11.07.2014, the assessee is eligible for exemption only if they provide auxiliary educational services.

It was alleged that no justification is given in the order-in-original that services of supply of paramedical staff come under the purview of auxiliary education services, as defined in the said Notification, till 11.07.2014 and thereafter, the same comes under any of the services mentioned under Sr. No. 9(b) of said Notification.

The Tribunal observed that “All the Services provided to educational institutions such as transport services, hostels, housekeeping, security, canteen services and any other type of services provided to educational institutions are exempted from payment of service tax and covered under the above entry of exemption notification. In the disputed matter it is on record that the respondent supplies the manpower to educational institutions by way of drivers/ administrative staff/ class 3& 4 staff that are essential for the educational institutions for performing their work. “

 A two-member bench comprising Mr Ramesh Nair, Member ( Judicial ) and Mr Raju, Member (Technical) held that the respondent is eligible for exemption from payment of Service Tax for supply of manpower to above mentioned educational institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012  and dismissed the appeal of the revenue.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates