GST Exemption not available on pre-examination, technical assistance for conduct of online examination & post-examination services

GST Exemption not available on pre-examination, technical assistance for conduct of online examination & post-examination services Introduction: An advanced ruling is a mechanism whereby taxpayers can get answers or clarifications regarding supply of goods and services, directly from tax authorities and the primary objectives for such a mechanism are to reduce litigation, attract FDI due to transparent tax liability, provide certainty with respect to tax liability and disclose ruling in an inexpensive and transparent manner. The Authority for Advanced Ruling (AAR) constituted by the tax authorities interprets tax laws for the taxpayers and it was created to address any issues faced by taxpayers and assist them by providing a decision on the clarification sought. The AAR’s appellate authority is the AAAR (Appellate Authority or National Appellate Authority for Advanced Ruling). Section 95 to Section 106 in Chapter XVII of CGST Act covers the procedures and rules related to advance rulings. An application is made by the taxpayer on the clarification sought by them. The taxpayer is provided an opportunity of being heard by the AAR. If there is consensus on resolution on the clarification sought between the AAR and taxpayer, an ‘Advance Ruling’ is issued by the AAR and on the contrary, the matter is referred to the AAAR. Facts of the application made to AAR, by taxpayer ‘Management and Computer Consultants (applicant)’, dated 05-Jul-2021: The applicant is engaged in the business of providing services related to the conduct of examinations by educational institutions and also IT related services for organizations involved in businesses other than educational institutions. The examination services provided by the applicant to universities, educational boards and councils can be broadly classified under three headings namely pre-examination services, technical assistance for online examinations and post-examination services. The applicant seeks to clarify if the following services provided by them are exempt services under Entry 66, as per original Notification No. 12/2017-Central Tax (Rate), dated 28.Jun.2017, amended vide Notification No. 02/2018-Central Tax (Rate), dated 25.Jan.2018. List of services provided by applicant are as follows.

• Offline and Online printing of pre-examination items for universities, educational boards and councils such as admit cards, registration certificate, exam enrollment forms, award list for entry of marks etc.
• Managing, designing and developing web based applications for conducting online examinations of universities, educational boards and councils, and related services
• Processing and scanning of exam results, mark sheets generation and printing of the same, printing of pass certificates and such other post-examination services related to universities, educational boards and councils.

The link to the amended Notification No. 02/2018-Central Tax (Rate), dated 25.Jan.2018 is as below. https://cbic-gst.gov.in/pdf/central-tax-rate/notfctn-02-2018-cgst-rate-english.pdf (cbic-gst.gov.in) The original Notification No. 12/2017-Central Tax (Rate), dated 28.Jun.2017 is as below. https://www.cbic.gov.in/resources//htdocs-cbec/gst/Notification12-CGST.pdf;jsessionid=60D9C20AA8A450D3CFABD42259F8CEA6 (cbic.gov.in) Contention of the applicant and details presented to AAR by applicant: The applicant contented that as per entry 66 of the original Notification No. 12/2017-Central Tax (Rate), dated 28.Jun.2017 and amended Notification No. 02/2018-Central Tax (Rate), dated 25.Jan.2018, the pre-examination activities, technical assistance provided for conducting online examination, post-examination activities, shall get covered under Entry 66 of the aforementioned Notifications and thereby exempt services. The applicant had submitted several work orders issued to them by educational boards, universities and councils, requesting them for services related to conduct of examinations. Further, the applicant also presented several advance rulings issued by other states namely Karnataka, Telangana and Gujarat to reiterate that the services provided by them for universities, educational boards and councils are exempt under entry 66. Contention of the revenue: The concerned officer from the department further explained the services required by universities, educational boards and councils from the work order presented by the applicant. The revenue was of the contention that the services will be exempt as per entry 66 only if the institution for which the service is rendered falls into the definition of ‘educational institution’ as defined in the said notifications. Observations and final ruling by AAR– Order No. 08/WBAAR/2021-22 dated 13.Sep.2021: The AAR ruled that the services provided by the applicant will be covered under entry 66 as per original Notification No. 12/2017-Central Tax (Rate), dated 28.Jun.2017 and amended Notification No. 02/2018-Central Tax (Rate), dated 25.Jan.2018 on the following grounds: 1. The order replicated the definition of ‘educational institution’ as given in amended Notification No. 12/2017-Central Tax (Rate), dated 28.Jun.2017 as follows.

a. Preschool education and education up to higher secondary school or equivalent

b. Education as part of a curriculum for obtaining a qualification recognized by any law for the time being in force

c. Education as a part of an approved vocational education course.

AAR was of the opinion that as per the work orders provided by the applicant, the institutions to which the applicant provided examination related services do fall under the category of ‘educational institution’ as defined above. 2. The AAR had to clarify only on two work orders from ‘The West Bengal Council of Rabindra open schooling’ and ‘West Bengal State Council of Technical and Vocational Education and Skill Development’. On review of the websites of the two institutions, the AAR opined that both the institutions do fit into the definition of educational institution. Hence the AAR concluded that the pre-examination, technical assistance for conduct of online examination and post-examination services offered by the applicant does qualify for exemption under entry 66 under original Notification No. 12/2017-Central Tax (Rate), dated 28.Jun.2017 and amended Notification No. 02/2018-Central Tax (Rate), dated 25.Jan.2018.