Odisha AAR Holds Coursera User Licenses Taxable at 18 Percent GST

The Odisha Authority for Advance Ruling (AAR) has held that the supply of Coursera User Licenses by M/s Unitech Engineers to the Odisha Skill Development Authority (OSDA) is not classifiable as an “Education Service” under Heading 9992 and does not qualify for exemption under Serial No. 72 of Notification No. 12/2017-Central Tax (Rate). The Authority ruled that the transaction is more appropriately classifiable under SAC 997331 as “Licensing services for the right to use computer software and databases” attracting GST at 18%.

A Bench comprising Sri Harsh Vardhan, Member (CGST), and Ms. Pratima Mohanty, Member (SGST), observed that the applicant was merely facilitating access to Coursera’s proprietary digital platform and was not itself imparting education or training.

“The role of the applicant is limited to facilitating access to third-party educational content.”

M/s Unitech Engineers, a proprietorship concern based in Odisha, had approached the AAR seeking clarification regarding the classification and taxability of supplies made to OSDA under an arrangement involving Coursera Inc., USA. Under the arrangement, Coursera provided digital learning content and user licenses for students enrolled under the Government of Odisha’s “NUA Odisha” scheme, while the applicant acted as distributor and subcontractor for supply and implementation of the licenses.

The applicant contended that the supplies could either qualify as exempt education services under Heading 9992 or alternatively fall under online content services or licensing services. It was also submitted that OSDA had initially reimbursed GST charged on invoices but later stopped reimbursement on the ground that the services were exempt under Serial No. 72 of Notification No. 12/2017.

The Authority examined the Memorandum of Understanding executed between OSDA and Coursera as well as the agreement between Coursera and the applicant. It noted that the applicant neither conducted training sessions nor exercised any control over curriculum, instructors or educational delivery. The students merely received access to Coursera’s digital platform through user licenses.

“The supply cannot be classified as education service.”

The AAR further observed that the transaction primarily involved granting a non-exclusive and limited right to access Coursera’s proprietary platform. It held that the predominant element of the transaction was licensing of intellectual property and not provision of educational services or online content services simpliciter.

The Authority also rejected the claim for exemption under Serial No. 72 of Notification No. 12/2017-Central Tax (Rate), holding that OSDA, being an autonomous body registered under the Societies Registration Act, could not be equated with the State Government for the purpose of the exemption notification. The Tribunal pointed out taht

“The supply of Coursera User Licenses by the applicant to OSDA is more appropriately classifiable under Heading 9973.”

Thus, the Odisha AAR ruled that the supply of Coursera User Licenses to OSDA is taxable at 18% GST under SAC 997331 and no exemption is available under the education services entry.

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