Rajendra Shukla, owner of Borivili-based Simple Shukla Tutorials, sought a ruling to determine whether providing coaching to students of classes XI and XII to prepare them for entrance exams such as medical or engineering would be subject to GST.
In his application, Shukla stated that a government notification (Notification 12, dated June 28, 2017) provided that services rendered by an educational institution to students would be taxed at ‘nil’ rate. He added that the terms ‘education’ and ‘institution’ had not been provided in the GST Act. In layman’s language it would mean any organisation formed to impart educational services. Thus, his coaching class should not be subject to GST.
However, the AAR bench noted that this notification specifically defined those educational institutions which would be exempt from GST. It covered educational institutions engaged in providing pre-school education and education up to higher secondary school or its equivalent and also those that provided approved vocational educational courses.
The exemption notification also covered educational institutions whose curriculum resulted in students obtaining a qualification recognised by law. The AAR bench pointed out that the coaching class did not have any specific curriculum and did not conduct any examination or award any qualification recognised by law.
“The activity of the applicant is not covered by the specific definition provided for interpretation of the exemption notification,” concluded the AAR. The ruling points out that a GST levy of 18% would apply on its fees.