The Gujarat Authority of Advance Ruling (AAR) has in its recent order passed on the application filed by M/s. Education Initiatives Pvt. Ltd has ruled that the educational assessment examination, Assessment of Scholastic Skills Through Educational Testing (ASSET) provided to school / educational organizations is exempted from the payment of GST.
Facts of the case:
- The Applicant, M/s. Education Initiatives Pvt. Ltd. deals in the products and solutions mainly intended to be used by the K-12 education segment i.e. primary and secondary schools for the assessment and learning.
- The applicant is working with private schools, public schools and leading organizations like the World Bank, Michael and Susan Dell Foundation, Google, Azim Premji Foundation and is doing large scale assessment projects with various state Governments.
- Among others, one of the offers offered by the Applicant to the schools is ASSET (Assessment of Scholastic Skills Through Educational Testing). ASSET is a scientifically designed, skill-based assessment Exam. The Schools use ASSET for the purpose of assessment, ASSET has gained the wide acceptance across the schools for the purpose of diagnostic assessment of its students.
Issues on which ruling was sought:
Whether the educational assessment examination (ASSET with its variants) provided by the applicant to school/educational organization is exempted from payment of GST under Sr. No. 66(b)(iv) of the Notification No. 12/2017-CT (rate) dated June 28, 2017 and entry No. 69(b)(iv) of Notification No. 9/2017-Integrated Tax (Rate) dated June 28, 2017 as well as equivalent SGST Notification.
Order of Gujarat AAR; Deliberations and Ruling
- The applicant has to satisfy following two conditions in order to be eligible for exemption under Sr. No. 66(b)(iv):
(i) The recipient of the services should be ‘Educational Institution’ as defined under the clause (y) of Paragraph 2 of the said Notification No. 12/2017-Central Tax (Rate).
(ii) the supply of service should be in relation to the examination conducted by the educational institution.
- We find that the applicant has stated that they are supplying “ASSET” multiple question to the Schools for the students. Therefore, such schools are already covered under the definition of ‘Educational Institution’, as provided under sub-clause (i) of clause (y) of Para 2 of the said N.N. 12/2017-Central Tax (Rate).
- We find that schools are providing education to the students up to higher secondary standard and therefore fall under the definition of Educational Institution as defined vide clause (y) of Paragraph 2 of the said Notification. Accordingly, we hold that the first condition has been fulfilled in respect of claim of subject exemption.
- Exemption entry uses this term ‘relation to’. The Supreme Court, while interpreting the term ‘relating to’ and ‘in relation to’, has assigned a wide and broad view of the term and therefore we are of the opinion that any service provided which helps the education institution in its act of examination will be covered and shall be eligible for exemption from levy of GST. Therefore, we hold that services have been provided to the schools in relation to conduct of examination of students by such educational Institutes. Therefore second condition for availing the exemption has also been satisfied in the instant matter.
In view of above deliberations , the two-member bench of Sanjay Saxena and Mohit Agarwal adjudged that exemption is available in respect of ASSET services provided to educational institution.
READ / DOWNLOAD ORDER:
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