GST Implications on Charitable Institutions

including Healthcare & Education Sector

CA AANCHAL ROHIT KAPOOR

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CHARITABLE INSTITUTIONS

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 Entry no. 1 of Notification No. 12/2017- Ct Rate

Services by an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 (43 of 1961) by way of
charitable activities
SERVICE
Service provider Charitable Activities Service Recipient
An entity registered under
section 12AA or 12AB Any Person

“Charitable activities" means activities relating to—

i. public health by way of ,—
A. care or counselling of
I. terminally ill persons or persons with severe physical or mental disability;
II. persons afflicted with HIV or AIDS;
III. persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or
B. public awareness of preventive health, family planning or prevention of HIV infection;

ii. advancement of religion, spirituality or yoga;

iii. advancement of educational programmes or skill development relating to,—

A. abandoned, orphaned or homeless children
B. physically or mentally abused and traumatized persons;
C. prisoners; or
D. persons over the age of 65 years residing in a rural area;
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iv. preservation of environment including watershed, forests and wildlife;
 CHARITABLE PURPOSE U/S 2(15) of Income Tax Act

Charitable Purpose includes

Relief Preservation of Preservation of

Yoga( as per Medical The advancement
of the environment( monuments or
amendmen Relief of any other
poor Education including places of objects
t made by object of general
watersheds, forests of artistic or
finance act public utility.
and wildlife) historic interest
2015

Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves
the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in
relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or
application, or retention, of the income from such activity, unless—
(ii) the aggregate receipts from such activity or activities during
(i) such activity is undertaken in the course of
and the previous year, do not exceed twenty per cent of the total
actual carrying out of such advancement of
receipts, of the trust or institution undertaking such activity or
any other object of general public utility;
activities, of that previous year;
Note: Any institution for being recognized as public charitable institution should have its objects falling within the meaning of
“CHARITABLE PURPOSE” as defined u/s 2(15) of Income Tax Act 1961.
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 Circular No. 66/40/2018-GST

CLASSIFICATION OF SERVICES - GST ON RESIDENTIAL PROGRAMMES OR CAMPS MEANT FOR ADVANCEMENT OF RELIGION,
SPIRITUALITY OR YOGA BY RELIGIOUS AND CHARITABLE TRUSTS

"The services provided by entity registered under Section 12AA of the Income Tax Act, 1961 by way of advancement of
religion, spirituality or yoga are exempt.
 Fee or consideration charged in any other form from the participants for participating in a religious, Yoga or meditation
programme or camp meant for advancement of religion, spirituality or yoga shall be exempt.
 Residential programmes or camps where the fee charged includes cost of lodging and boarding shall also be exempt as
long as the primary and predominant activity, objective and purpose of such residential programmes or camps is
advancement of religion, spirituality or yoga.
 However, if charitable or religious trusts merely or primarily provide accommodation or serve food and drinks against
consideration in any form including donation, such activities will be taxable.
 Similarly, activities such as holding of fitness camps or classes such as those in aerobics, dance, music etc. will be
taxable".

It is accordingly clarified that taxability of the services of religious and charitable trusts by way of residential programmes or
camps meant for advancement of religion, spirituality or yoga may be decided accordingly.

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[2019] 101 taxmann.com 2 (AAAR-MAHARASHTRA) Shrimad Rajchandra Adhyatmik Satsang Sadhana Kendra, In re
Section 2(17), read with section 7, of the Central Goods and Services Tax Act, 2017/Section 2(17), read with section 7, of the
Maharashtra Goods and Services Tax Act, 2017 - Business - Appellant a public charitable and religious trust engaged in
spreading knowledge of Jain Religion submitted that its main objective is advancement of religious and spiritual teachings,
hence it cannot be said to be carrying any 'business' as contemplated under section 2(17) of CGST Act –
• On perusal of activities of trust it is found that though charitable trust is formed with fundamental objectives of carrying
out spiritual activity and salvation, but trust also sells various goods and services like books, CDs and DVDs for
advancement of religious teachings to people desiring to buy them and such an activity of trade and
commerce by itself forms a part of objective of trust –
Ques :- Whether intention of legislature is to tax all activities of supply of goods and services by charitable trust
except those specifically exempted –
Ans:-yes –

Ques:- Whether very fact that certain services have been carved out and given out a special treatment makes it clear that all
trade and commerce transaction of selling books, statues, CDs and DVDs etc. done commercially for consideration fall within
scope of 'supply' and come within broad ambit of 'business' under CGST Act –
Ans:-yes

Ques:- Whether therefore, AAR was right in holding that appellant, a public charitable and religious trust engaged in
advancement of religious and spiritual teachings also engaged in sale of spiritual goods, can be said to be in 'business' and
therefore attract provisions of CGST Act, 2017 –
Ans:- yes[Paras 5 and 6]
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 Exemption to Charitable organisations

Pursuant to Notification No. 12/2017 CT dated 28th June 2017, the Govt. has exempted services by way of charitable
activities, provided by charitable organisations from levy of GST. Thus charitable organisations engaged exclusively in
charitable activities are exempted from obtaining registration.

However, charitable organisations are compelled to register where they have receipts on account of ancillary activities like
providing shop on rent to outsider( so that the visitors get tea and food), charitable hospitals running pharmacy and providing
medicines at concessional rate etc.(Donations Excluded & Adverisement, Sponsorship, Consultancy, Sales included)

Acharya Shree Mahashraman Chaturmas Pravas Vyavastha Samiti Trust, In re vs. (AAR)(2019] 110 taxmann.com 282 (AAR -
KARNATAKA)/[2019] 31 GSTL 138
Rajiv Gandhi Centre For Aquaculture, In re vs. AAR([2019] 108 taxmann.com 465 (AAAR - TAMILNADU)/[2019] 76 GST 71

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 Circular No. 116/35/2019- GST
SECTION 7 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - SUPPLY - SCOPE OF - LEVY OF GST ON THE SERVICES OF DISPLAY OF
NAME OR PLACING OF NAME PLATES OF THE DONOR IN THE PREMISES OF CHARITABLE ORGANISATIONS RECEIVING DONATION OR GIFTS
FROM INDIVIDUAL DONORS

Individual donors provide financial help or any other support in the form of donation or gift to institutions such as religious
institutions, charitable organisations, schools, hospitals, orphanages, old age homes etc. The recipient institutions place a
name plate or similar such acknowledgement in their premises to express the gratitude. When the name of the donor is
displayed in recipient institution premises, in such a manner, which can be said to be an expression of gratitude and public
recognition of donor's act of philanthropy and is not aimed at giving publicity to the donor in such manner that it would be an
advertising or promotion of his business, then it can be said that there is no supply of service for a consideration (in the form
of donation). There is no obligation (quid pro quo) on part of recipient of the donation or gift to do anything (supply a service).
Therefore, there is no GST liability on such consideration.

Some examples of cases where there would be no taxable supply are as follows:—
a) "Good wishes from Mr. Rajesh" printed underneath a digital blackboard donated by Mr. Rajesh to a charitable Yoga
institution
b) "Donated by Smt. Malati Devi in the memory of her father" written on the door or floor of a room or any part of a temple
complex which was constructed from such donation.
In each of these examples, it may be noticed that there is no reference or mention of any business activity of the donor which
otherwise would have got advertised. Thus where all the three conditions are satisfied namely the gift or donation is made to
a charitable organization, the payment has the character of gift or donation and the purpose is philanthropic (i.e. it leads to
no commercial gain) and not advertisement, GST is not leviable.

 If instructed to put Board of particular Dimensions with

CA Aanchal
Firm Kapoor
Name in Return , then it will be taken as Supply. 8
 Entry no. 9D of Notification No. 12/2017- Ct Rate
Services by an old age home run by Central Government, State Government or by an
entity registered under section 12AA or 12AB of the Income-tax Act, 1961 (43 of 1961)
• to its residents (aged 60 years or more) against consideration
• Up to twenty-five thousand rupees per month per member,
• provided that the consideration charged is inclusive of charges for boarding, lodging and maintenance.

Service provider Service Recipient

SERVICE
Old age home run by Any Residents (aged 60 years or
Central Government,
more)
State Government or Consideration up to 25000 including B,L & M
an entity registered under
section 12AA or 12AB

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 OLD

Entry no. 80 of Notification No. 12/2017- Ct Rate

Services by way of training or coaching in recreational activities relating to—
a) arts or culture, or
b) sports by charitable entities registered under section 12AA of the Income-tax Act.

SERVICE
Service provider Training or coaching relating to arts or culture or sports Service Recipient
Charitable entities registered
under section 12AA of the Any person
Income-tax Act. CA Aanchal Kapoor 10
 SI. No. 80
CHAPTER 9996 TRAINING & COACHING ACTIVITIES
INSERTED

SI. No. of NN Old Description New Description

12/2017 CT(R)

Services by way of training or coaching in recreational "Services by way of training or coaching in-
80 activities relating to- (a) recreational activities relating to arts or
(a) arts or culture, or culture, by an individual, or
(b) sports by charitable entities registered under section (b) sports by charitable entities registered
12AA of the Income-tax Act. under Section 12AA or 12AB of the Income
Tax Act.";

SERVICE
Service provider Service Recipient
Training or coaching in recreational activities relating to arts or culture
INDIVIDUAL
Any person

Service provider SERVICE

Service Recipient
Charitable entities registered Training or coaching in sports
under section 12AA/12AB of the Any person
Income-tax Act.
 Entry no. 13 of Notification No. 12/2017- Ct Rate
Services by a person by way of— Defined in (zc) point of N.N. 12/2017 means,” the body of people at large
sufficiently defined by some common quality of public or impersonal nature.
a) conduct of any religious ceremony;
b) renting of precincts of a religious place meant for general public, owned or managed by an entity registered as a
charitable or religious trust under section 12AA or 12AB of the Income-tax Act, 1961 (hereinafter referred to as the
Income-tax Act) or a trust or an institution registered under sub-clause (v) of clause (23C) of section 10 of the Income-
tax Act or a body or an authority covered under clause (23BBA) of section 10 of the said Income-tax Act:
Provided that nothing contained in entry (b) of this exemption shall apply to,-
i. renting of rooms where charges are one thousand rupees or more per day; Per Room, Per Shop, Per Hall limits
ii. renting of premises, community halls, kalyanmandapam or open area, and the like where charges are ten thousand
rupees or more per day;
iii. renting of shops or other spaces for business or commerce where charges are ten thousand rupees or more per
month.

SERVICES
1. Conduct of any religious ceremony e.g PUJA Service Recipient
Service provider
Any person Any person
SERVICES
2. Renting of precincts of a religious
place meant for general public
Service provider
Subject to Monetary Limits Service Recipient
An entity registered as a charitable or religious
trust u/s 12AA/12AB/10(23C)(v)/10(23BBA) of the Any person
Income-tax Act, 1961 CA Aanchal Kapoor 12
 Other points related to charitable institutions
Taxable
Exempt
(Prasad Sacred Food
Sale of Goods by charitable
exempt -2106)
institution

Public libraries Exempt

(Entry No. 50 of N.N. 12/2017)

Goods or services to
Taxable
Charitable Institution
Eg. Rental, CA services

Renting of space for

Taxable
Advertisement Hoardings

Import of service by No RCM

charitable institution for (Exempt-Entry No.10 of Not.
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charitable purpose 9/2017-IT(Rate))
 Online pooja
[2018] 100 taxmann.com 291 (AAR - MAHARASHTRA) Sadashiv Anajee Shete, In re
Classification of services - Heading No. 9963 - Religious ceremony - Facilitator between pundit and website users/Maharashtra Goods and
Services Tax Act, 2017 - Applicant is engaged in business of assisting believers, followers and devotees to book Pundits/Brahmins online for
their religious ceremonies like pujas, abhisheks, etc. - Said service is being provided through applicant's own website by charging money -
He is facilitator between pundits and customers - Applicant is taking booking of services online on his own website from customers and
intimates names of Pundits/Brahmins who would perform job to customers also online - Whether applicant is not covered under Entry No.
13 of exemption Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 and, therefore, his services are not exempt from GST - Held,
yes [Para 4.3]
Classification of services - Religious ceremony - Heading No. 9963 - Maharashtra Goods and Services Tax Act, 2017 - Whether, on facts,
stated under heading 'Classification of services/Maharashtra Goods and Services Tax Act, 2017 - Facilitator between pundit and website
users (Intermediary)', Pundits are persons who are actually performing services like puja, abhishek to customers and, therefore, they are
eligible for exemption from GST - Held, yes [Para 6]
Section 24, read with section 2(44) and 2(45), of the Central Goods and Services Tax Act, 2017/Section 24 of the Maharashtra Goods and
Services Tax Act, 2017 - Registration - Compulsory registration in certain cases –
Question :- Whether where applicant is providing services and doing activities through electronic network of own website and facilitated
recipient of services on electronic basis through their internet website, applicant is squarely covered as 'Electronic commerce operator'
and considering section 24 he shall be required to be registered under Act
Answer- Yes –
Question:- Whether further since he is liable to receive commission for supply of services he would be liable to pay GST on value of
commission received from website users and not for amount received –
Answer:- Yes

CA Aanchal Kapoor 14
[2019] 110 taxmann.com 282 (AAR - KARNATAKA)Acharya Shree Mahashraman Chaturmas Pravas Vyavastha Samiti Trust, In re
Section 7 of the Central Goods and Services Tax Act, 2017/Section 7 of the Karnataka Goods and Services Tax Act, 2017 - Supply - Scope of –

Ques. I. Whether where applicant, a charitable trust, was constructing buildings and giving it on rent, etc. which was not directly related to
advancement of religion, spirituality or yoga, it could be said that these services were in course or furtherance of business and it was to be
held that these were covered within meaning of 'supplies' under section 7(1)
Ans:- yes

Ques. II. Whether where a person (supplier) makes a taxable supply, he shall be liable to get himself registered, if his aggregate turnover
exceeds threshold –
Ans:-yes

Ques. III. - Whether entry No. 7(ii) of Notification No. 11/2017 - Central tax (Rate), dated 28-6-2017, reveals that accommodation provided in
commercial places meant for residential or lodging purposes having a declared tariff of a unit of accommodation of Rs. 1000 per day per
unit or equivalent would be taxable at 6 per cent under CGST Act –
Ans:- yes –

Ques IV:- Whether thus, where applicant, a charitable trust, is a supplier of service within scope of section 7(1) and they are providing
accommodation services to pilgrims and charging persons on a monthly basis or daily basis for residential purposes, activity of applicant is
squarely covered under entry No. 7(ii), if declared tariff of a unit of accommodation is Rs. 1000 or more per day or equivalent –
Ans:- yes [Para 12.2]

Ques V. Whether entry No. 14 of Notification No. 12/2017 - Central Tax (Rate), dated 28-6-2017, states that 'Services by a hotel, inn, guest
house, club or campsite by whatever name called, for residential or lodging purposes, having a declared tariff of a unit of accommodation
below one thousand rupees or equivalent is exempt from tax' and these services must be of heading 9963 –
Ans:- Held, yes [Para 12.3] CA Aanchal Kapoor 15
Ques V. Whether conditions which need to be satisfied for a contract to be covered under entry No. 12 of Notification No. 12/2017 - Central
Tax (Rate), dated 28-6-2017, are that (i) it must be a service of renting of residential dwelling and (ii) it must be for use as
residence –
Ans.yes

Ques. VI:- Whether where applicant charitable trust was providing accommodation services to pilgrims and charging persons on a monthly
basis or daily basis for residential purposes, since, accommodations provided were for temporary stay and not for a permanent residence,
accommodation services provided would not be covered under said entry.
Ans :- yes

Ques VII. Whether as per entry 7 of Notification No. 11/2017 - Central Tax (Rate), dated 28-6-2017, supply of goods being food or any article
for human consumption or drink by way of or part of any service or in any manner whatsoever is taxable –
Ans:-yes

Ques VIII :- Whether thus, supply of food and beverages by applicant, a charitable trust, at subsidized rates to devotees is taxable under GST
Act
Ans:- yes

Ques. IX:- Applicant charitable trust is providing space for registered person without consideration for supply of food and beverages to
devotees, and, consideration for food and beverages supplied by such registered person is received by him directly from devotees - Whether
this would amount to a supply of usage rights of space without consideration and devotees are consumers –
Ans:- yes

Ques. X:- Whether Schedule I to CGST Act, which is related to 'activities to be treated as supply even if made without consideration' does not
cover this item as long as registered person and applicant arc not related persons –
Ans:- yes CA Aanchal Kapoor 16
Ques. XI:- Whether in case two are related persons as per definition of 'related persons' as defined in Explanation to section 15, then, providing
of space for registered person without consideration would be a supply liable to tax as per provisions of CGST Act, 2017 –
Ans:- yes

Ques XII:- Section 2(13), of the Integrated Goods and Services Tax Act, 2017 - Intermediary - Applicant charitable trust intends to book hotel
rooms for pilgrims from outside and supply of service is by hotel to pilgrims and applicant is facilitating supply of accommodation service to
pilgrims by hotel - Whether since applicant arranges supply of services and facilitates supply, it would be squarely covered under definition of
'intermediary' –
Ans:- yes

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 Levy & Rate of tax
HEALTHCARE SECTOR

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 Section 9(CGST):- Levy & collection
Section 5 (IGST Act)

(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all
intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on
the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the
Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be
paid by the taxable person,

Thus from above section it is clear that section 9 covers within its ambit all the supplies of goods or services or both. Law makers had
exempted certain supply of services by mentioning those supplies in GST Exemption notification 12/2017 CT Rate.

Levy Rate of GST Exemption

SAC 9993 @ Health care services

18% exempt , Hence Tax
0% Except Certain
residential care
services.(Entry 74 of
Not. 12/2017)
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 S.No Activities Exempt/ Taxable

1 Medicines, Consumables & implants to in-patients Exempt

2 Food Supplied to patients Exempt
3 Room rent upto Rs. 5000/- per day Exempt
4 Diagnostic & pre or post consulting Exempt
5 Diagnosis Centers Exempt
6 Retention Money Hospital Exempt
7 Sale of medicines Taxable
8 Food supply to attendents & visitiors Taxable
9 Hospital having Rental Income of premises Taxable
10 Hospital having Income of ROOMS provided to Attendants Taxable
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Rate of GST

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 Rate of GST on health care services
SAC Code Description Rate

99931 999311 Inpatient services 18% but

999312 Medical and dental services exempted via
999313 Childbirth and related services notification
12/2017
999314 Nursing and Physiotherapeutic services
999315 Ambulance services
999316 Medical Laboratory and Diagnostic-imaging services
999317 Blood, sperm and organ bank services
999319 Other human health services including homeopathy, unani, ayurveda, naturopathy,
acupuncture and the like
99932 999321 Residential health-care services other than by hospitals. 18%
999322 Residential care services for the elderly and person with disabilities.
99933 999331 Residential care services for children suffering from mental retardation, mental health
illnesses or substance abuse Nil
999332 Other social services with accommodation for children Nil
999333 Residential care services for adults suffering from mental retardation, mental health illnesses Nil
or substance abuse
999334 Other social services with accommodation for adults 18%
99934 999341 Vocational rehabilitation services NiL
999349 Other social services without accommodation for the elderly and disabled n.e.c Nil

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Exemption
Notification

Entry No. 74 of Notification No.

12/2017

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 12/2017
Amended by
4/2022

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 Entry No. 74 of notification No. 12/2017 Ct- Rate
Entry No. 77 of Notification No. 9/2017- IT Rate
Services by way of— Eg. Nurses,
Physiotherapist
a) health care services by a clinical establishment, an authorized medical practitioner or para-medics;
[Provided………]
b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above.
SERVICE
a) a) Health care services other than
Room Rent exceeding 5000/- per day
Service provider (Definition (zg) of N.N. 12/2017) Service Recipient
•Clinical Establishment,
(Defined Through N.N. 12/2017)
•Authorized Medical Practitioner
(Defined Through N.N. 12/2017) •Any Person
•Para-medics
( Not defined in GST Law)
SERVICE
b) transportation of a patient in an
b) ambulance, other than those specified
in (a) above

Service provider
Service Recipient

•Any Person CA Aanchal Kapoor

•Any Person 25
 Meaning of Healthcare services

As per definition (zg) of Notification No. 12/2017- CT Rate

“Health Care Services” means
 any service by way of diagnosis or treatment or care for illness, injury, deformity,abnormality or pregnancy
 in any recognised system of medicines in India and
 includes services by way of transportation of the patient to and from a clinical establishment,
 but does not include hair transplant or cosmetic or plastic surgery,
 except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects,
developmental abnormalities, injury or trauma;

Health care services By Birth

Defects
Not defined means includes
in GST

Recognized system Diagnosis or treatment or care Transportation of the patient

of medicines in for illness, injury, deformity, to and from a clinical
abnormality or pregnancy establishment
India

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 Recognized System of Medicines in India

A name for conventional medicine Traditional system of medicine

Allopathy used by some followers Siddha originating in ancient times in
South India

A set of Physical and mental exercises, Body comprises of four basic

originally from India, intended to give Unani elements and disturbance in this
Yoga control over mind and body
equilibrium result in disease.

A system of treatment of disease that A system of treating disease in which

Naturopathy avoids drugs and surgery and Homeopathy sick people are given very small
emphasizes the use of natural agents( amount of natural substances
such as air, water) and physical means.

Traditional system of medicines that

seeks to treat mind, body and spirit by
Ayurveda
diet, herbal remedies, exercise and
meditation.
CA Aanchal Kapoor 27
 Clinical Establishment
As per definition 2(s) of notification No. 12/2017- Ct Rate
"clinical establishment" means
 a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called,

or
 that offers services or facilities requiring diagnosis treatment or care for illness, injury, deformity, abnormality or
pregnancy in any recognized system of medicines in India,

 or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative
services of diseases; Covers diagnostic
centers
2(k) “Authorised medical practitioner"means
 a medical practitioner registered with any of the councils of the recognized system of medicines established or
recognised by law in India and
 includes a medical professional having the requisite qualification to practice in any recognised system of medicines in
India as per any law for the time being in force;

Para medics is not defined in GST Law. But as per general meaning para medics are trained health care professionals. Eg.
Nursing staff, physiotherapists, technicians, lab assistants etc.

CA Aanchal Kapoor 28
 Composite Supply concept
SI. No. 31A
HEADING 9993
HOSPITALS foregone through this
amendment

-The SI. No. 31A shall be INSERTED, namely: -

SI. No. of NN Description Condition Old New
3/2022 CT(R)
Rate Rate

31A Services provided by a clinical establishment by way The credit of input tax Exempt 2.5%
of providing room other than Intensive Care Unit charged on goods
(ICU)/Critical Care Unit (CCU)/Intensive Cardiac Care and services used in
supplying the service
Unit (ICCU)/Neo natal Intensive Care Unit (NICU)
has not been taken
having room charges exceeding Rs. 5000 per day to
a person receiving health care services.
‘(xxxviii) 'clinical establishment' means, -
a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or
treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India, or a place established as an
independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases;
(xxxix) 'health care services' means, -
any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India
and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic
surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities,
injury or trauma;’
 SI. No. 32
WASTE TREATMENT 11/2017 AMENDED BY
HEADING 9994 UNITS 3/2022

-The item (ia) of SI. No. 32 shall be INSERTED, namely: -

SI. No. of NN Description Old New

11/2017 CT(R)
Rate Rate

32 (ia) Services by way of treatment or disposal of biomedical waste Exempt 6%

or the processes incidental thereto by a common bio-medical
waste treatment facility to a clinical establishment.
 Omitted by Entry No. 75 of notification No. 12/2017- Ct Rate EXEMPTION
4/2022 CT(R) Entry No. 78 of N.N. 9/2017-It Rate WITHDRAWN
Services provided by operators of the common bio-medical waste treatment facility to a clinical establishment by way
of treatment or disposal of biomedical waste or the processes incidental thereto.

SERVICE Treatment or disposal of

biomedical waste or the
processes incidental thereto
Service provider
Service Recipient
Common bio-medical waste Clinical establishment
treatment facility

Bio- Medical Waste is any kind of waste containing infectious material.

Eg. Infusion kits, discarded blood, unwanted microbiological culture, identifiable body parts, used bandages,
dressings etc.

Deleted
CA Aanchal Kapoor 31
 Entry No. 73 of Notification No. 12/2017- Ct Rate
Entry No. 76 of N.N. 9/2017-IT rate
Services provided by the cord blood banks by way of preservation of stem cells or any other service in relation to such
preservation

SERVICE Preservation of stem cells or any

other service in relation to such
preservation

Service provider Service Recipient

Cord blood banks Any person

Entry No. 46 of Notification no. 12/2017- CT Rate

Services by a veterinary clinic in relation to health care of animals or birds

SERVICE Health care of animal & birds

Service provider Service Recipient

veterinary clinic Any person Deleted

CA Aanchal Kapoor 32
 Entry No. 74A of Notification no. 12/2017- CT Rate

Services provided by rehabilitation professionals recognised under the Rehabilitation Council of India Act, 1992 (34 of
1992) by way of rehabilitation, therapy or counselling and such other activity as covered by the said Act at medical
establishments, educational institutions, rehabilitation centers established by Central Government, State Government or
Union territory or an entity registered under section 12AA or 12AB of the Income-tax Act, 1961 (43 of 1961).

SERVICE
Rehabilitation, therapy or
counselling and such other
activity
Service Recipient
Service provider
Any Person at
Rehabilitation professionals • Medical establishments,
recognised under the • educational institutions,
Rehabilitation Council of • Rehabilitation centers established by
India Act, 1992 Central Government, State
Government or Union territory or an
entity registered under section 12AA
or 12AB of the Income-tax Act, 1961
(43 of 1961).

CA Aanchal Kapoor 33
Place of supply

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Place of Supply of Healthcare Services where the location of supplier of services and the location of the recipient of
services is in India
The place of supply of services, except the services specified in sub-sections (3) to (14),—
For Online Consultancy ,
 Section 12(4) of IGST Act, 2017
the general rule
Location where the services are actually performed. 12(2)/13(2)will apply.

Place of Supply of Healthcare Services when either supplier or recipient are located outside India

 As per Section 13(3) of Integrated Goods and Services Tax Act, 2017(IGST): Location where the services are actually
performed. Refer Note-1 of Rule 7 of IGST Rules, 2017.
As per Section 13(6)
• Where services are supplied at more than one location, including a location in the taxable territory its place of supply shall be
the location in the taxable territory.
As per Section 13(7)
• Where the services are supplied in more than one State or UT, the place of supply of such services shall be taken as being in
each of the respective State or UT and the value for services separately collected or determined in in terms of the contract or
agreement entered into this regard.
• Value of services where services are provided I more than one State/ UT, In the absence of contract or agreement. As per
Rule 7 of the IGST Rules, 2017, has been notified vide Notification No.04/2018-IT dated.31st December, 2018 as per table:

Nature of Service Manner of Allocation

Services supplied to individuals. By applying the generally accepted accounting principles.
CA Aanchal Kapoor 35
Relevant Notifications &
Circular

CA Aanchal Kapoor 36
 Circular No. 32/06/2018
Sr. No. Issue Clarification
1 Hospitals hire senior doctors/ consultants/ technicians independently, Services provided by senior doctors/ consultants/
without any contract of such persons with the patient; and pay them technicians hired by the hospitals, whether
consultancy charges, without there being any employer- employee
relationship. Will such consultancy charges be exempt from GST? Will employees or not, are healthcare services
revenue take a stand that they are providing services to hospitals and not to which are exempt.
patients and hence must pay GST?
2 Retention money: Hospitals charge the patients, say, Rs.10000/- and pay to Healthcare services have been defined to mean any service
the consultants/ technicians only Rs. 7500/- and keep the balance for by way of diagnosis or treatment or care for illness, injury,
providing ancillary services which include nursing care, infrastructure deformity, abnormality or pregnancy in any recognised
facilities, paramedic care, emergency services, checking of temperature, system of medicines in India[para 2(zg) of Notification No.
weight, blood pressure etc. Will GST be applicable on such money retained 12/2017- CT(Rate)]. Therefore, hospitals also provide
by the hospitals? healthcare services. The entire amount charged by them
from the patients including the retention money and the
fee/payments made to the doctors etc., is towards the
healthcare services provided by the hospitals to the patients
and is exempt.
3 Food supplied to the patients: Health care services provided by the clinical
establishments will include food supplied to the patients; but such food
Food supplied to the in-patients as
may be prepared by the canteens run by the hospitals or may be advised by the doctor/nutritionists is a part of composite
outsourced by the Hospitals from outdoor caterers. When outsourced, there supply of healthcare and not separately taxable. Other
should be no ambiguity that the suppliers shall charge tax as applicable and supplies of food by a hospital to patients (not admitted) or
hospital will get no ITC. If hospitals have their own canteens and prepare their attendants or visitors are taxable.
their own food; then no ITC will be available on inputs including capital goods
and in turn if they supply food to the doctors and their staff; such supplies,
even when not charged, may be subjected to GST. CA Aanchal Kapoor 37
 Circular No. 51/25/2018
APPLICABILITY OF GST ON AMBULANCE SERVICES PROVIDED TO GOVERNMENT BY PRIVATE SERVICE PROVIDERS UNDER NATIONAL
HEALTH MISSION
The service tax exemption at Sl. No.2 of Notification No. 25/2012 dated 20.06.2012 has been carried forward under GST in the identical form
vide SI. No. 74 of Notification No. 12/2017-CT (R) dated 28.06.2017. The service tax exemption at serial No. 25(a) of notification No. 25/2012
dated 20.06.2012 has also been substantially, although not in the same form, continued under GST vide Sl. Nos. 3 and 3 A of the Notification
No. 12/2017-CT (R) dated 28.06.2017. The said exemption entries under Service Tax and GST notification read as under.
Service Tax GST
Sl. No. 2: Sl. No. 74:
(i) Health care services by a clinical establishment, an authorized Services by way of-
medical practitioner or para-medics; (a) health care services by a clinical establishment, an authorized
(ii) Services provided by way of transportation of a patient in an medical practitioner or para-medics;
ambulance, other than those specified in (i) above. (b) services provided by way of transportation of a patient in an
ambulance, other than those specified in (a) above.
Services provided to Government, a local authority or a Sl. No. 3:
governmental authority by way of water supply, public health, Pure services (excluding works contract service or other composite
sanitation conservancy, solid waste management or slum supplies involving supply of any goods) provided to the Central
improvement and upgradation Government, State Government or Union territory or local
authority or a Governmental authority or a Government Entity by
way of any activity in relation to any function entrusted to a
Panchayat under article 243G of the Constitution or in relation to any
function entrusted to a Municipality under article 243W of the
Constitution.
CA Aanchal Kapoor 38
Service Tax GST

Services provided to Government, a local authority or a SI. No. 3A:

governmental authority by way of water supply, public Composite supply of goods and services in which the value of
health, sanitation conservancy, solid waste supply of goods constitutes not more than 25 per cent, of the
value of the said composite supply provided to the Central
management or slum improvement and upgradation
Government, State Government or Union territory or local
authority or a Governmental authority or a Government
Entity by way of any activity in relation to any function
entrusted to a Panchayat under article 243G of the
Constitution or in relation to any function entrusted to a
Municipality under article 243 W of the Constitution.

3. Functions of 'Health and sanitation' is entrusted to Panchayats under Article 243G of the Constitution of India read with Eleventh Schedule. Function
of 'Public health' is entrusted to Municipalities under Article 243 W of the Constitution read with Twelfth schedule to the Constitution. Thus ambulance
services are an activity in relation to the functions entrusted to Panchayats and Municipalities under Articles 243G and 243W of the Constitution.
4.In view of the above, it is clarified that the clarification contained in the Circular No. 210/2/2018- Service Tax dated 30th May, 2018 with regard to the
services provided by Government and PSPs by way of transportation of patients in an ambulance is applicable for the purpose of GST also, as the said
services are specifically exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 vide Sl. No. 74.
5. As regards the services provided by PSPs to the State Governments by way of transportation of patients on behalf of the State Governments against
consideration in the form of fee or otherwise charged from the State Government, it is clarified that the same would be exempt under—
a) SI. No. 3 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a pure service and not a composite supply involving supply of any
goods, and
b) SI. No. 3A of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a composite supply of goods and services in which the value of
supply of goods constitutes not more than 25 per cent of the value of the said composite supply.
CA Aanchal Kapoor 39
 Summary Circular No. 51/25/2018

Exempt by way of Sr. No. 3/3A of N.N. Exempt by way of Sr. No. 74
12/2017 of N.N. 12/2017
Private service 3 Govt, LA 2
Relation to Function relating Patient
provider to Panchayat /Municipality

Pure Service Composite

(Goods 25% of value
of Composite supply)
1

Exempt Sr.
No. 74

Patient

CA Aanchal Kapoor 40
 Circular No. 92/11/2019-GST
Free samples and gifts:
i. It is a common practice among certain sections of trade and industry, such as, pharmaceutical companies which often
provide drug samples to their stockists, dealers, medical practitioners, etc. without charging any consideration. As per
sub-clause (a) of sub-section (1) of section 7 of the said Act, the expression "supply" includes all forms of supply of
goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to
be made for a consideration by a person in the course or furtherance of business. Therefore, the goods or services or
both which are supplied free of cost (without any consideration) shall not be treated as 'supply' under GST (except in
case of activities mentioned in Schedule I of the said Act). Accordingly, it is clarified that samples which are supplied
free of cost, without any consideration, do not qualify as 'supply' under GST, except where the activity falls within the
ambit of Schedule I of the said Act.
ii. Further, clause (h) of sub-section (5) of section 17 of the said Act provides that ITC shall not be available in respect of
goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. Thus, it is clarified that input
tax credit shall not be available to the supplier on the inputs, input services and capital goods to the extent they are
used in relation to the gifts or free samples distributed without any consideration. However, where the activity of
distribution of gifts or free samples falls within the scope of 'supply' on account of the provisions contained in Schedule
I of the said Act, the supplier would be eligible to avail of the ITC.
iii. Buy one get one free: Consideration of additional item already included in the gross amount charged, no separate
supply and no ITC reversal required. Composite or mixed supply needs to be checked.
iv. Reimbursement to distributor etc. for expenses incurred by it – Reimbursement not as a pure agent hence, leviable to
GST.
v. Family trips – If given to sole distributor, schedule I transaction. Tax liable and ITC eligible. If given to unrelated party, no
GST, ITC can be claimed as it is in the course or furtherance of business and not blocked otherwise.
41
 Concept of Credit on Free Samples
Case 1 Case 2
Pay GST on samples supplied and avail ITC ( Reverse the credit involved in free samples supplied
Schedule 1)

The same gets reversed in the hands

Valuation as per Rule 27 (FMV) leading to Rule of supplier.
30: Cost of Production + 10% of cost of
Production

Credit is blocked as per section 17(5)(h)

CA Aanchal Kapoor 42
 Circular No. 72/46/2018:- Circular to clarify procedure in respect of time expired drugs or medicines

Sale = 90 Sale = 95
Cost= 80
Manufacturer Wholesaler Retailer
ITC= 4 GST= 4.5 GST= 4.75
Medicine Expired
1 Fresh Supply
Expired Sale Invoice
medicine Sale = 95 Sale = 95
destroyed . Wholesaler
Manufacturer Regd Person
Credit reversal
as per 17(5)(h)= GST= 4.75 GST= 4.75
4.75 BOS/ BOS/
Fresh Supply Commercial
Commercial
Destroy medicine . documents documents Composition/
No credit reversal Manufacturer Wholesaler
2 unregd
as no credit availed Rs. 99.75 Rs. 99.75

Credit Note GST Credit Note

GST Credit Note
3 Cost= 80
Manufacturer Wholesaler Retailer
ITC= 4
Return 90 Return 95
Credit Reverse= Rs. 4 GST =4.5 GST =4.75

Note:- Sec. 34(2) Time period when commercial

CA Aanchal Kapoor credit note to be issued. 43
 ILLUSTRATIONS
• (1). A doctor is providing healthcare services for Rs.40Lakhs and he has
rental income from residential house of Rs.5 Lakhs, he is not liable for
registration since both the receipts are exempt.
• (2). The same property is used by the tenant for commercial purposes (i.e.
renting medical shop) then the doctor would be liable to take registration
under GST since his aggregate turnover exceeds Rs.20 Lakhs. Aggregate
turnover for the purpose of registration in GST, includes taxable as well as
exempt services. Nevertheless, he would pay GST only in respect of rent
from commercial property.
• (3). Further, his medical income is less than Rs.15 Lakhs but he receives
rent of Rs.3 Lakhs from a commercial property located in other State, in
such case he would not be liable for registration since aggregate turnover
does not exceed threshold limit. As per Notification No.10/2017-IT
dated.13.10.2017, if the aggregate turnover of any person on all India
Basis is less than Rs.20 /10 Lakhs, he is not liable to take registration even
if he is making inter-State supply of Taxable Services.

CA Aanchal Kapoor 44
Case Laws

CA Aanchal Kapoor 45
[2021] 128 taxmann.com 310 (Gujarat)/[2021] 87 GST 3 (Gujarat)/[2021] 54 GSTL 11
(Gujarat)[09-07-2021]
GST : Where Charitable Trust was running a medical store, even though Charitable
Trust was giving medicines to patients at a lower rate, with no profit, sale of medicines
by Trust would be a taxable supply of goods, hence, aggregate turnover exceeding
threshold limit as mentioned in section 22(1), Trust would have to obtain registration.

Section 22, read with sections 2(17) and 7, of the Central Goods and Services Tax Act,
2017/Section 22, read with section 2(17) and 7, of the Gujarat Goods and Services Tax
Act, 2017 - Registration - Persons liable for - Whether where Charitable Trust was
running a medical store, even though Charitable Trust was selling medicines to patients
at a lower rate with no profit, sale of medicines for consideration by Trust in course of
their business would amount to a taxable supply of goods - Held, yes - Whether
therefore, where aggregate turnover of Trust in a financial year exceeded threshold limit
mentioned in section 22(1), Trust would have to obtain registration - Held, yes [Paras 7, 9
and 10
CA Aanchal Kapoor 46
Sri Ganga Ram Hospital v. Commissioner of Central Excise, Delhi-1* [2018] 94
taxmann.com 226 (New Delhi - CESTAT)
Classification of services (OR) - Section 65(104C) of the Finance Act, 1994 - Support services
of business or commerce - Assessee, a hospital, was engaged in health care services to
patients - To provide such services, it had engaged professionals and doctors on contractual
basis - These doctors were provided space in hospital with required facilities to attend to
patients coming to hospital - These doctors were paid professional fee in terms of contracts
- Fee paid to doctors was computed based on a pre-determined ratio on amount received
by assessee from patients - Adjudicating Authority held that part of amount retained by
assessee out of total charges collected from patients was liable to service tax under
category of 'support services of business or commerce' - Whether Adjudicating Authority
was justified in his view - Held, no [Para 13] [In favour of assessee]
GST/Service Tax : Where assessee, a hospital, was engaged in health care services to
patients and to provide such services it had engaged doctors on contractual basis and it
retained certain amount out of total charges collected from patients, assessee was not
liable to pay service tax on retained amount under category of 'support services of
business or commerce’ CA Aanchal Kapoor 47
AUTHORITY FOR ADVANCE RULINGS, MADHYA PRADESH J C Genetic India (P.) Ltd., In re[[2019] 104 taxmann.com 88 ]
Classification of services - Madhya Pradesh Goods and Services Tax Act, 2017 - Healthcare services - Heading 9993 (Healthcare services by
clinical establishment) –
 Whether mere involvement in sophisticated testing and providing consultancy would not be a sufficient criterion, though necessary,
for qualifying as a Clinical Establishment per se - Held, yes –
 Applicant is a Healthcare company, engaged in diagnosis, pre and post-counselling therapy and prevention of diseases by providing
necessary sophisticated tests - Applicant has a collaboration with diagnostic companies accredited
by NABL and DS1R –
 Whether since applicant do not have their own authority for giving clear report/opinion on their own for tests, and they have to get
all tests conducted and certified by NABL accredited laboratory, applicant are functioning as sub-contractors to accredited
companies and not as an independent Clinical Establishment - Held, yes –
 Whether since applicants have failed to prove their own authority and recognition for testing and giving clear report/opinion on
their own, which can only be done by a NABL accredited laboratory, applicants are not qualified to avail benefit as envisaged under
exemption Notification of 12/2017-Central Tax (Rate), dated 28-6-2017 [S.No.74 and Para 2(s)] and corresponding notification
issued under MPGST Act, for 'healthcare services' and 'clinical establishment' is not applicable to them - Held, yes –
 Whether thus, though services provided by applicant maybe healthcare services but they do not qualify to be a clinical establishment -
Held, yes [Paras 7.3, 7.4, 7.6 and 7.8] [In favour of revenue]
GST: Healthcare services provided by a company which is not an independent clinical
establishment are not exempt from GST. The Applicant has neither come forward with the names of such
companies with which the Applicant claims to have collaboration, nor have the Applicant produced any document
evidencing their own status of accreditation by NABL, which obviously is the sole accreditation body for testing and
calibration laboratories. In absence of anything brought on record by the Applicant, we are compelled to believe that the
CA Aanchal Kapoor
Applicant is making a vain attempt to circumvent the essential condition for qualification of Clinical Establishment. 48
Ernakulam Medical Centre (P.) Ltd., In re vs.( [2019] 103 taxmann.com 182 (AAAR-KERALA)/[2019] 74 GST 49 (AAAR-
KERALA)(MAG)/[2019] 23 GSTL 418 (AAAR-KERALA) )
Supply of Medicines to In
Classification of services - Kerala State Goods and Services Tax Act, 2017 - Healthcare services - Patients & Out Patients
•Heading No. 9993 [Healthcare services by clinical establishment] - Section 2(30) of the Central Goods and Services Tax Act, 2017/Section
2(30) of the Kerala State Goods and Services Tax Act, 2017 - Supply - Composite supply

QUESTION:
•Whether since invoice/bill raised for treatment as an in patient is a single bill charging for all facilities/services utilized for treatment in
hospital including room rent, nursing care charges, laboratory, consumables, medicines, equipment charges, doctor's fee, etc., incase of an
inpatient, hospital has provided a bundle of supplies which is classifiable under health care services and is exempt from tax?
Answer
•Held, yes –Exemption available. Composite Supply for In patients.

QUESTION:
• Whether however, in case of out patients health care service provided by hospital is restricted to consultation of doctor and medicines
bought by outpatients from pharmacy owned by hospital is billed separately and cannot be considered as composite supply to extend
exemption and, hence, supply of medicines and allied items to outpatients is liable to GST being a taxable supply
Answer
•Held, yes [Para's 10, 14 and 15] [In favour of revenue]
•GST: Supply of medicines and allied items to out patients by Hospital is not bundled with doctor's consultation and is liable to GST being
a taxable supply.

CA Aanchal Kapoor 49
In re M/s. Medivision Scan and Diagnostic Research Centre P. Ltd. (GST AAR Kerala) ( [2019] 105 taxmann.com 226 (AAR - KERALA) )
M/s. Medivision Scan and Diagnostic Research Centre Pvt. Ltd. is a clinical establishment engaged purely in diagnostic sentinels such as
clinical biochemistry, micro biology, chemotology, clinical pathology, radiology, ECG, radiometry, pulmonary function test etc. They are
coming under the purview of Clinical Establishment Act and are rendering services through qualified laboratory technicians, paramedical
technicians, doctors and radiologist. Moreover, as per Sec23(1)(a) of the CGST Act, any person engaged exclusively in the business of
supplying goods or services or both that are not liable to tax or exempt from tax are not liable to get registration. In the circumstances they
sought advance ruling on the fallowing:
Question
(i) Whether diagnostic service provider has to take registration under GST.

(ii) Whether the applicant is exempt from GST considering the exemption provided in the Notification No.12/2017-CT (Rate) dtd.28-06-
2017.

Answer
(i)By virtue of section 23 of State Goods and Services Tax Act, any person engaged exclusively in the business of supplying goods or
services or both, that are not liable to tax or wholly exempt from tax under GST Act, are not liable to take registration. However, such
persons are liable to obtain registration if they are receiving any goods or services liable to tax under reverse charge as per notifications
issued under Section 9(3) of the State Goods and Service Tax Act.

(ii)As per SL. No.74 (Notification No.12/2017-CT Rate Dt: 28/06/2017, services by way of diagnosis come under the category of health
care services covered under SAC 9993 in connection with health care services provided by a clinical establishment and are, therefore
exempted.

CA Aanchal Kapoor 50
Sayre Therapuetics (P.) Ltd., In re vs. ([2018] 93 taxmann.com 418/13 GSTL 224/69 GST 87 (AAR - KARNATAKA))
• Classification of services - Health care services (NR) - Applicant is involved in diagnosis, pre and post counselling, therapy
and prevention of diseases by providing tests that are sophisticated and relevant
Question:
• Whether medical team of applicant is involved in complete cycle and, hence they facilitate diagnosis process and,
therefore, services provided by applicant qualify to be health care services?
• Since applicant qualifies to be a clinical establishment and services offered/provided by applicant qualify to be health care
services, intra-state supply of said services attract NIL rate of central tax
•Answer:Held, yes [Paras 11 and 12] [In favour of applicant]CGST : Where applicant is involved in providing services of
diagnosis, pre and post counselling, therapy and prevention of diseases by providing tests that are sophisticated and
relevant, medical team of applicant facilitate diagnosis process, applicant qualifies to be a clinical establishment and
services provided by it qualify to be healthcare services which attract nil rate of central tax.

Saifee Hospital Trust vs Comm Service Tax- Iii Mumbai on 29 May, 2019
In the erstwhile VAT era, the issue of taxability of medicine drugs, stents, and implants during the course of medical
treatment under MVAT was argued before the Hon’ble Maharashtra Sales Tax Tribunal.
The tribunal after discussing all the facets of sales, deemed sales, works contract, intention behind sale of drugs etc. held the
following:
1. Supply of medicine, drugs, stents & implants during the course of medical treatment doesn’t amount to sale (deemed
sale) under MVAT Act
2. There is no machinery provision to levy VAT on supply of food as a composite charge is levied under the umbrella of
health service.
3. Charges for special bed & mattresses are not exigible to tax. Kapoor
CA Aanchal 51
Columbia Asia Hospitals (P.) Ltd., In re ([2018] 100 taxmann.com 212 (AAR - KARNATAKA)
AUTHORITY FOR ADVANCE RULINGS, KARNATAKA)
•Applicant is engaged in providing health care services categorizing them as in-patients and out-patients services - It is also engaged in supply
of medicines to in-patients and out-patients - It also operates restaurant/canteen in its premises, which are used for supplying food and other
eatable items to its patients and their attendants.
• Whether two or more supplies of goods or services or both which are naturally bundled in which principal supply is exempt and others
are taxable can be treated as a composite supply of principal supply and if such principal supply is not a non-taxable supply and such
composite supply with principal supply being exempt supply would be treated as an exempt composite supply?
•HELS YES : It can be treated as a composite supply of principal supply and if such principal supply is not a non-taxable supply and such
composite supply with principal supply being exempt supply would be treated as an exempt composite supply
•Whether applicant is eligible to claim credit of input tax paid on inputs, input services and capital goods which are attributable to
supplies of goods or services which are taxable under provisions of CGST Act and not attributable to exempt supplies of goods or services
under CGST Act ?
•Where applicant is engaged in providing health care services and also supplies medicines to patients and also operates restaurant/canteen in
its premises, it is eligible to claim credit of input tax paid on inputs, input services and capital goods which are attributable to supplies of
goods or services which are taxable under provisions of CGST Act and not attributable to exempt supplies of goods or services under CGST
Act.
•Cross Charge Whether supply of goods from corporate office to separately registered units would amount to supply of goods and services -
Held, yes - Whether however since employees of corporate office have no relationship of employee-employer with other units, hence,
corporate office and units are distinct persons under CGST Act - Held, yes - Whether thus, activities performed by employees at corporate
office in course of or in relation to employment such as accounting, other administrative and IT system maintenance for units located in other
States as well, i.e., distinct persons, as per section 25(4) of CGST Act shall be treated as supply as per Entry 2 of schedule I of CGST Act - Held,
yes [Para 9]’’

CA Aanchal Kapoor 52
 Dabur India Ltd. vs. Commissioner of CGST ( [2020] 113 taxmann.com 423 (Allahabad)/[2020] 34 GSTL 9 (Allahabad)/[2020] 78 GST 219)
•Classification of goods - HSN 38089191 - Mosquito repellent
•Assessee was engaged in manufacturing a product named 'odomos' - Assessee claimed that said product had to be classified as medicine
under Heading No. 3004 @12% - Authority for Advance Ruling, however, classified odomos, under HSN 38089191-18% Appellate Authority
upheld said ruling –
•It was noted that assessee's product was not normally prescribed as a medicine by Medical Practitioner as a drug
•Moreover, product was being sold on demand at counters in shops and establishments and sales were not restricted to
chemists/druggists alone
•Whether in view of aforesaid, impugned order passed by authorities below did not require any interference
•Held, yes [Paras 31 and 38] [In favour of revenue]
•GST :Where applicant was engaged in manufacturing a product named 'odomos' since said product was being sold as mosquito repellent
on demand at counters in shops and establishments and sales were not restricted to chemists/druggists alone, same had to be classified
under HSN 38089191.

CMC Vellore Association, In re vs. ([2020] 113 taxmann.com 55 (AAR-TAMILNADU)/[2020] 32 GSTL 601 (AAR - TAMILNADU)/[2020] 78 GST
66 (AAR - TAMILNADU)
•Classification of service - Tamil Nadu Goods and Services Tax Act, 2017 - Supply of in-patient healthcare services - Heading No. 9993 [Human
health and social care services]
• Section 2(30) of the Central Goods and Services Tax Act, 2017/Section 2(30) of the Tamil Nadu Goods and Services Tax Act, 2017 - Supply -
Composite supply –
•Applicant is engaged in provision of health care services to both in-patients and out-patients –
•Whether medicines, drugs, stents, consumables and implants used in course of providing health care services to in-patients admitted to
hospital for diagnosis, or medical treatment or procedures is a composite supply of in-patient healthcare service ?
• Held, yes - Whether supply of in-patient healthcare services by applicant as defined in para 2(zg) of Notification No. 12/2017-CT (Rate),
dated 28-6-2017 is exempt from CGST and SGST as per Sl. No. 74
• Held, yes [Para 7(1)]GST: Medicines, drugs, stents, consumables and implants used in course of providing health care services to in-
patients admitted to hospital for diagnosis, or medical treatment or procedures
CA Aanchal Kapoor is a composite supply of in-patient healthcare service.
53
Tathagat Health Care Centre LLP, In re ([2018] 93 taxmann.com 419 (AAR – KARNATAKA)AAR, KARNATAKA)
•Classification of services (NR) - Heading (SAC) 997212 - Rental or leasing services Whether rental or leasing services involving
own or leased non-residential property is classified under heading (SAC) 997212 and is taxable under GST;
• There is no provision available in Act which allows exemption on an input service if output service provided by taxable
person is exempt Held, yes
• GST is leviable on rent paid/payable for premises taken on lease by applicant a cardiology specialised hospital - Held, yes [

MIOT Hospitals Ltd. vs. State of Tamil Nadu ([2020] 117 taxmann.com 46 (Madras)) (VAT Regime)
•Whether 'works contract' includes any agreement for 'fitting out' of any movable property and it is not confined to any
genre of contract.
•Held, yes Whether, therefore, fitting out or implanting of prosthetics into physiology or body of patient for alleviation of pain
or for improvement of life of patient in course of medical/surgical procedure can be construed as 'works contract'
•Held, yes - Whether during such fitting out or implanting , there is not only transfer of possession of prosthetics into
physiology of patient but also ownership of such prosthetics to patient for consideration in course of provision of
medical/health service
•Held, yes - Whether similarly, in course of taking x-ray, scan, MRI/CT Scan for such in-patient, cost of which get included into
package can be termed as processing of moveable property
• Held, yes - Whether value of prosthetics and charges incurred towards X-ray, C.T. Scan, PET Scan, etc., are liable to tax; value
of medicine and other consultation charges are to be excluded while determining taxable value
• Held, yes - Whether, however, such activity/transaction of hospital/medical services rendered appears to have been
exempted under GST Regime from July 2017
• Held, yes [Paras 187 and 200] [Partly in favour of assessee]GST/EXCISE/ST/VAT: Fitting out or implanting prosthetics such as
stents, valves, etc. into body of patientsand taking x-ray, scan, MRI/CT Scan while treating in house patients, being 'works
contract', private hospitals are liable tax; however, no taxCAcan
Aanchal
beKapoor
demanded on value of medicines dispensed. 54
 In re Oswal Industries ltd.(Nimba Nature Cure Village) [2020] 119 taxmann.com 269/
[2021] 83 GST 261 (AAR-Gujarat)

No GST Exemption on Naturopathy Centers offering Physical, Psychological & Spiritual Health overhaul with the help of
Power of Nature: AAR

Royal CareSpeciality Hospital Ltd., In re

[2019] 110 taxmann.com 481/[2020] 79 GST 92 (AAR - TAMILNADU)

• Whether medicines, consumables and implants used in course of providing health care services to inpatients is a composite supply of
inpatient services classifiable under SAC 999311
- Held, yes
• Whether supply of health care services or inpatient services by applicant are exempted from GST as per Sl. No. 74 of Notification No.
12/2017 - Central Tax (Rate), dated 28-6-2017
- Held, yes [Para 8] [In favour of assessee]
• Whether applicant is eligible for credit of tax paid on input services used exclusively for providing exempt services of health services to
inpatients such as laundry services used for inpatients
- Held, no [Para 8] [In favour of revenue]
• Whether for input services such as housekeeping, leasing of equipment used for both exempt supply of health services to inpatients
and taxable supply of medicines, etc. to outpatients, appropriate input tax credit eligible is to be determined under section 17(2) read
with rule 42
- Held, yes [Para 8] [In favour of assessee]
 Ray Constructions Ltd., In re
[2020] 119 taxmann.com 146 (AAR - KERALA)

- Applicant is engaged in providing services of construction including materials and labour as per tender
requirements
- They have received a work order from Vikram Sarabhai Space Centre for construction of a building for space
transportation system
- It is a composite contract which includes supply of materials as well as service –
- They have also received another work order from Infrastructure Kerala Ltd., a Public Private Partnership Company
promoted by Government of Kerala, for development of Medical College which includes construction of road,
bridges and other infrastructure
- Applicant has requested for advance ruling on rate of tax applicable for above works contracts awarded by
Government authorities -

Whether since services provided by applicant under both contracts fall under definition of works contract under
section 2(119) and services are being provided to Central Government and State Government, applicant is eligible
for concessional rate of GST of 12 per cent prescribed in Sl. No. 3(vi)(a) of Notification No. 11/2017 - Central
Tax (Rate) dated 28-6-2017 as amended
- Held, yes [Para 9]
 Dr. H.B. Govardhan, In re [2021] 124 taxmann.com 302/86 GST 157 (AAR-
Karnataka)
• Applicant is providing two types of services. There is no liability of tax on diagnostic and treatment services rendered to
Hospitals/ Laboratories/ biobanks registered in United States of America and other countries. However, for the second
service of business promotion services rendered, as per the contract submitted, are liable to tax under the GST Acts

• The diagnostic and treatment services are covered under Health Care Services and the medical services and part time
practising in Clinic are exempted from the payment of GST

• Section 13(8) of the IGST Act, 2017 specifies that the place of supply of the “Intermediary Services” be the location of the
supplier of services. Thus the place of supply in this case is location of the applicant i.e. India. Hence the impugned
services are taxable under GST Law.

• Also the payment for applicant’s service to foreign companies, is received in foreign currency and the applicant and the
foreign company are not related persons. The place of supply is India, in terms of Section 13(8) of the IGST Act 2017 and
hence the impugned services are not covered under export of services, as all the required conditions are not fulfilled

The applicant living in India providing two types of service :

(1) rendering Consulting Services to Hospitals/ Laboratories / Biobanks
registered in United States of America (USA) and other countries through
phone calls, Video Conference, Mails and other Electronic devices getting
remuneration in dollars
(2) Business Promotion Services between the foreign company and the clinical
centres located in India
Section 9:- Levy and Rate of Tax

CA Aanchal Kapoor 58
 Section 9:- Levy & collection
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State
supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined
under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of
the Council and collected in such manner as may be prescribed and shall be paid by the taxable person,

Thus from above section it is clear that section 9 covers within its ambit all the supplies of goods or services or both. Law makers had
exempted certain supply of services by mentioning those supplies in GST Exemption notification 12/2017 CT Rate.

Levy Rate of GST Exemption

SAC 9992 @ Services to and by

18% Educational Institution
SAC 9963 exempt , Hence Tax
Accommodation, 0%. ( Entry 66 of Not.
Food And Beverage 12/2017)
Services

CA Aanchal Kapoor 59
Meaning of Educational
Institution

CA Aanchal Kapoor 60
 Play Schools ? Institutes giving Foreign
Degrees ?

Schools up to 5th Std.

IIM’s, IIT’s, ICAI, ICSI ?
without affiliation ?

Coaching Institutes ? School Canteens?

Hostel ? Sale of Books? Ilets Centres?

CA Aanchal Kapoor 61
 Educational Institution
As per Definition 2(y) mentioned in notification 12/2017-CT Rate

“Educational institution” means an institution providing services by way of,-

i. pre-school education and education upto higher secondary school or equivalent; Schools
Colleges, Institutes
ii. education as a part of a curriculum for obtaining a qualification recognized by any law for the time beinglike ICAI, IIT’s
in force;
iii. education as a part of an approved vocational education course ; Industrial Training
Defined in law
Institutes

Important points in definition

Pre- Qualification
School Equivalent recognized
education by law

Eg. Play school, nursery, Eg. International Schools

kindergarten school.(Before 1st ) Law in India ?
(Pre school are not regulated by CA Aanchal Kapoor Old ST Circular 107/1/2009 62
any authority in India
 Circular 107/1/2009 ST

Institute recognized by UGC(University Grant Commission), AICTE(All India Council for Technical Education), Institutions through Union
Acts
i. Indian Institute of Aircraft Engineering v. Union of India* [[2013] 34 taxmann.com 191 (Delhi)]
The expression "recognized by law" is a very wide one. The legislature has not used the expression "conferred by law" or "conferred by
statute". Thus, even if the certificate/degree/diploma/qualification is not the product of a statute but has approval of some kind in 'law',
would be exempt.

 Training given by private coaching institutes although imparting Coaching related to Degree Courses would not
be covered as such training does not lead to grant of a recognized qualification/degree themselves.

 ILETS Institutes---Not covered by Exemption.

 Only Pre-schools are also covered by Exemption(“and” word in 2(y)(i) is wrongly used and to meet intent should
be read as “OR”).

 Day Care is covered under SAC 999351 @ 18%.

CA Aanchal Kapoor 63
 Approved vocational education course

As per Definition 2(h) mentioned in notification 12/2017-CT Rate

“Approved vocational education course” means, -

i. a course run by an industrial training institute or an industrial training centre affiliated to the National Council for
Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the
Apprentices Act, 1961 (52 of 1961); or

ii. a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered
with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship;

CA Aanchal Kapoor 64
 Meaning of Education

The word “ Education” has not been defined in GST Law. However Apex Court in case of SOLE TRUSTEE, LOKA SHIKSHANA

TRUST VERSUS COMMISSIONER OF INCOME-TAX, Civil Appeal No. 2130 and 2131 of 1970 Dt. 28/8/1975 held that

 Education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of

students by normal schooling.

CA Aanchal Kapoor 65
Relevant entries of notification
12/2017-CT(Rate)

CA Aanchal Kapoor 66
 Entry No. 66 of Notification No. 12/2017 CT Rate

Services provided – Any Service of

a) by an educational institution to its students, faculty and staff; 9992 or 9963

aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee.

b) to an educational institution, by way of,-

i. transportation of students, faculty and staff;
ii. catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union
territory;
iii. security or cleaning or house-keeping services performed in such educational institution;
iv. services relating to admission to, or conduct of examination by, such institution;
Provided that nothing contained in 4[sub-items (i), (ii) and (iii) of item (b)] shall apply to an educational institution other than an institution
providing services by way of pre-school education and education up to higher secondary school or equivalent:

[Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of,—
i. pre-school education and education up to higher secondary school or equivalent; or
ii. education as a part of an approved vocational education course.]
v. supply of online educational journals or periodicals:

CA Aanchal Kapoor 67
 Entry No. 66 of Notification No. 12/2017 CT Rate
Service Recipient
a) & aa) • Students
SERVICE Any Service • Faculty
of 9992 OR • Staff
9963
Service provider
•Educational Institution
conduct of entrance examination against Any person
consideration in the form of entrance fee

b)
SERVICE
Service provider Service Recipient
Any Person • transportation of students, faculty and staff •Educational Institution ---- pre-
• catering, including any mid-day meals scheme school education and education upto
• security or cleaning or house-keeping services higher secondary school or equivalent

Any Person • admission to, or conduct of examination by, •Educational Institution

such institution

•Educational Institution ----

Any Person • online educational journals or periodicals education as a part of a curriculum for
obtaining a qualification recognized by
CA Aanchal Kapoor 68
any law for the time being in force
 Circular No.177/02/2022 Clarifications regarding applicable GST rates &
exemptions on certain services
ISSUE RELATED TO SECTOR DISCUSSED IN THIS CIRCULAR IS
AS FOLLOWS :

Applicability of GST on application fee charged for entrance or

the fee charged for issuance of eligibility certificate for
admission or for issuance of migration certificate by educational
institutions;
EXEMPT
4) Accordingly, it is clarified that the amount or fee charged from prospective students for entrance or admission, or for issuance
of eligibility certificate to them in the process of their entrance/admission as well as the fee charged for issuance of migration
certificates by educational institutions to the leaving or ex-students is covered by exemption under Sl. No. 66 of Notification No.
12/2017-Central Tax (Rate) dated 28.06.2017.
 Whether the activity of selling of space for advertisement in souvenirs is eligible for
6. concessional rate of 5%.

1) Representation has been received regarding the GST 2) As per serial number (i) of entry 21 of notification No. 11/2017-Central Tax
rate applicable on selling of space for advertisement in (Rate) dated 28.06.2017 selling of space for advertisement in print media
souvenirs published in the form of books by different attracts GST @ 5%. The term ‘print media’ has been defined in clause (zt) of
institutions/organizations like educational institutions, notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as under:
social, cultural and religious organizations including clubs
etc. “print media” means, —
i. ‘book’ as defined in sub-section (1) of section 1 of the Press and
3) Further, sub-section (1) of section 1 of the Press and Registration of Books Act, 1867 (25 of 1867), but does not include business
Registration of Books Act, 1867 defines ‘book’ as follows:
directories, yellow pages and trade catalogues which are primarily meant
“Book” includes every volume, part or division of a volume, and
for commercial purposes;
pamphlet, in any language and every sheet of music, map, chart ii. …….
or plan separately printed.
5) Accordingly, as recommended by the GST Council, it is clarified sale of
space for advertisement in souvenir book is covered under serial number
4) It therefore appears that ‘book’ has been defined in (i) of entry 21 of Notification No. 11/2017-Central Tax (Rate) and attracts
GST @ 5%.
the Press and Registration of Books Act, 1867 in an
inclusive manner with a wide ambit which would cover
souvenir book also.
 Clarification No. 55/29/2018-GST
TAXABILITY OF SERVICES PROVIDED BY INDUSTRIAL TRAINING INSTITUTES:-
1.Representations have been received requesting to clarify the following:

a) Whether GST is payable on vocational training provided by private ITIs in designated trades and in other than designated trades
b) Whether GST is payable on the service, provided by a private Industrial Training Institute for conduct of examination against consideration in the
form of entrance fee and also on the services relating to admission to or conduct of examination.

2. With regard to the first issue, [Para 1(a) above], it is clarified that Private ITIs qualify as an educational institution as defined under para 2(y) of
notification No. 12/2017-CT(Rate) if the education provided by these ITIs is approved as vocational educational course.
• The approved vocational educational course has been defined in para 2(h) of notification ibid to mean a course run by an ITI or an Industrial Training
Centre affiliated to NCVT (National Council for Vocational Training) or SCVT (State Council for Vocational Training) offering courses in designated trade
notified under the Apprenticeship Act, 1961; or a Modular employable skill course, approved by NCVT, run by a person registered with DG Training in
Ministry of Skill Development.
• Therefore, services provided by a private ITI in respect of designated trades notified under Apprenticeship Act, 1961 are exempt from GST under Sr.
No. 66 of Notification No. 12/2017-CT(Rate). As corollary, services provided by a private ITI in respect of other than designated trades would be liable
to pay GST and are not exempt.

3. With regard to the second issue, [Para 1(b) above], it is clarified that in case of designated trades, services provided by a private ITI by way of conduct
of entrance examination against consideration in the form of entrance fee will also be exempt from GST [Entry (aa) under Sr. No. 66 of Notification No.
12/2017-CT(Rate) refers].
• Further, in respect of such designated trades, services provided to an educational institution, by way of, services relating to admission to or conduct
of examination by a private ITI will also be exempt [Entry (b(iv)) under Sr. No. 66 of notification No. 12/2017-CT(Rate) refers].
• It is further clarified that in case of other than designated trades in private ITIs, GST shall be payable on the service of conduct of examination against
consideration in the form of entrance fee and also on the services relating to admission to or conduct of examination by such institutions, as these
services are not covered by the exemption ibid.

4. As far as Government ITIs are concerned, services provided by a Government ITI to individual trainees/students, is exempt under Sl. No. 6 of 12/2017-
CT(R) dated 28.06.2017 as these are in the nature of services provided by the Central or State Government to individuals. Such exemption in relation
CA Aanchal Kapoor 71
to
services provided by Government ITI would cover both - vocational training and examinations conducted by these Government ITIs.
 ITI
Summary

Private ITI Govt. ITI to

individual trainees/
students

Vocational Services relating to

Training admission or
conduct of
examination Sr. No. 6 of N.N.
12/2017
Other than
Designated
designated By ITI To ITI
Trade
Trade
Designated Trade Designated Trade

Exempt Exempt Exempt

Taxable (Sr. no. 66 of N.N. (Entry b(iv) of Sr. no.
(Sr. No. 66 of
(GST payable) 12/2017) 66 of N.N. 12/2017)
N.N. 12/2017)

Non CAdesignated
Aanchal Kapoor Trade taxable. GST 72
payable
 Entry No. 67- CGST (Deleted vide notification No. 28/2018- Central Tax (Rate) dated, 31st December, 2019 w.e.f.
1st January 2019)
Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students,
by way of the following educational programmes, except Executive Development Programme: -
a) two year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which
admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management;
b) fellow programme in Management;
c) five year integrated programme in Management Deleted
CIRCULAR NO. 82/01/2019-GST - CENTRAL TAX
CLARIFICATION REGARDING APPLICABILITY OF GST ON VARIOUS PROGRAMMES CONDUCTED BY INDIAN INSTITUTE OF MANAGEMENTS
(IIMs)
I am directed to invite your attention to the Indian Institutes of Management Act, 2018 which came into force on 31st January, 2018.
According to provisions of the IIM Act, all the IIMs listed in the schedule to the IIM Act are "institutions of national importance". They are
empowered to (i) grant degrees, diplomas, and other academic distinctions or titles, (ii) specify the criteria and process for admission to
courses or programmes of study, and (iii) specify the academic content of programmes. Therefore, with effect from 31st January, 2018, all
the IIMs are "educational institutions" as defined under notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as they provide
education as a part of a curriculum for obtaining a qualification recognised by law for the time being in force.
2. At present, Indian Institutes of Managements are providing various long duration programs (one year or more) for which they award
diploma/degree certificate duly recommended by Board of Governors as per the power vested in them under the IIM Act, 2017. Therefore,
it is clarified that services provided by Indian Institutes of Managements to their students- in all such long duration
programs (one year or more) are exempt from levy of GST. As per information received from IIM Ahmedabad, annexure 1 to this
circular provides a sample list of programmes which are of long duration (one year or more), recognized by law and are exempt from GST.
3. For the period from 1st July, 2017 to 30th January, 2018, IIMs were not covered by the definition of educational institutions as given
in notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. Thus, they were not entitled to exemption under Sl. No. 66 of the said
notification. However, there was specific exemption to following three programs of IIMs under Sl. No. 67 of notification No. 12/2017-
CA Aanchal Kapoor 73
Central Tax (Rate).(Given above)
 CIRCULAR NO. 82/01/2019-GST - CENTRAL TAX

4. For the period from 31st January, 2018 to 31st December, 2018, two exemptions, i.e. under Sl. No. 66 and under Sl. No. 67 of notification
No. 12/2017- Central Tax (Rate), dated 28.06.2017 are available to the IIMs. The legal position in such situation has been clarified by Hon'ble
Supreme Court in many cases that if there are two or more exemption notifications available to an assessee, the assessee can claim the one
that is more beneficial to him. Therefore, from 31st January, 2018 to 31st December, 2018, IIMs can avail exemption either under Sl. No 66 or
Sl. No. 67 of the said notification for the eligible programmes. In this regard following case laws may be referred-

i. H.C.L. Limited v. Collector of Customs [[2001] 2001 taxmann.com 2674/(130) ELT 405 (SC)]
ii. Collector of Central Excise, Baroda v. Indian Petro Chemicals [1997 (92) ELT 13 (SC)]
iii. Share Medical Care v. Union of India reported at [2007] 2007 taxmann.com 1364/(209) ELT 321 (SC)
iv. CCE v. Maruthi Foam (P) Ltd. [1996 (85) RLT 157 (Tri.) as affirmed by Hon'ble Supreme Court vide [2004] 2004 taxmann.com 1597/(164)
ELT 394 (SC)

5 Indian Institutes of Managements also provide various short duration/short term programs for which they award participation certificate
to the executives/professionals as they are considered as "participants" of the said programmes. These participation certificates are not any
qualification recognized by law. Such participants are also not considered as students of Indian Institutes of Management. Services provided
by IIMs as an educational institution to such participants is not exempt from GST. Such short duration executive programs attract standard
rate of GST @ 18% (CGST 9% + SGST 9%). As per information received from IIM Ahmedabad, annexure 2 to this circular provides a sample
list of programmes which are short duration executive development programs, available for participants other than students and are not
exempt from GST.

CA Aanchal Kapoor 74
 CIRCULAR NO. 82/01/2019-GST - CENTRAL TAX
7. Following summary table may be referred to while determining eligibility of various programs conducted by Indian Institutes of
Managements for exemption from GST.

Sr. No. Periods Programmes offered by Indian Institutes of Management Whether exempt
from GST
1 1st July, 2017 to 30th i. two-year full time Post Graduate Programmes in Management for the Post Exempt from GST
January, 2018 Graduate Diploma in Management, to which admissions are made on the
basis of Common Admission Test (CAT) conducted by the Indian Institute of
Management,
ii. fellow programme in Management,
iii. five years integrated programme in Management.
i. One- year Post Graduate Programs for Executives, Not exempt from
ii. Any programs other than those mentioned at Sl. No. 67 of notification No. GST
12/2017- Central Tax (Rate), dated 28.06.2017.
iii. All short duration executive development programs or need based specially
designed programs (less than one year).
2 31st January, 2018 All long duration programs (one year or more) conferring degree/diploma as Exempt from GST
onwards recommended by Board of Governors as per the power vested in them under
the IIM Act, 2017 including one- year Post Graduate Programs for Executives.

All short duration executive development programs or need based specially

designed programs (less than one year) which are not a qualification recognized Not exempt from
by law. GST
CA Aanchal Kapoor 75
 Entry No. 69 of Notification No. 12/2017 CT- Rate

Any services provided by, Skill

a) the National Skill Development Corporation set up by the Government of India; Development/Enhancing
Programmes
b) a Sector Skill Council approved by the National Skill Development Corporation;

c) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;

d) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to-

i. the National Skill Develop-ment Programme implemented by the National Skill Development Corporation; or
ii. a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or
iii. any other Scheme implemented by the National Skill Development Corporation
Entry No. 70 of Notification No. 12/2017 CT- Rate
Services of assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill Development
and Entrepreneurship by way of assessments under the Skill Development Initiative Scheme
Entry No. 71 of Notification No. 12/2017 CT- Rate
Services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen
Kaushalya Yojana implemented by the Ministry of Rural Development, Government of India by way of offering skill or
vocational training courses certified by the National Council for Vocational Training.
CA Aanchal Kapoor 76
 Entry No. 22 of Notification No. 12/2017 Ct- Rate

Services by way of giving on hire—

c) motor vehicle for transport of students, faculty and staff,
 to a person providing services of transportation of students, faculty and staff
 to an educational institution providing services by way of pre-school education and education upto higher secondary
school or equivalent.]

SERVICE Hiring of Motor Vehicle for Service Recipient

transport of students, faculty and staff Any Person providing
Service Provider services of transportation of
Exempt by Entry No. 22
•Any Person students, faculty and staff
Exempt by Sr.
No. 66 (b)(i)
•Educational Institution ----
pre-school education and
education upto higher
secondary school or
equivalent
CA Aanchal Kapoor 77
 Press release dated 13.07.2017

GST - CLARIFICATION AS TO APPLICABILITY OF GST ON ANNUAL SUBSCRIPTION/FEE CHARGED AS LODGING/BOARDING

CHARGES BY EDUCATIONAL INSTITUTIONS FROM ITS STUDENTS FOR HOSTEL ACCOMMODATION

There are some reports that GST@18% will be levied on annual subscription/fees charged for lodging in hostels. This is not
true. There is no change in tax liability relating to education and related services in the GST era, except reduction in tax rate
on certain items of education.
It may be mentioned that services provided by an educational institution to students, faculty and staff are fully exempt.
Educational institution has been defined as an institution imparting

• Annual subscription/fees charged as lodging/boarding charges by such educational institutions from its students for
hostel accommodation shall not attract GST.

Lodging/ Boarding charges

Educational Institutions Exempt to students
for hostel accommodation

CA Aanchal Kapoor 78
 CIRCULAR NO. 117/36/2019-GST
CLASSIFICATION OF SERVICES - CLARIFICATION ON APPLICABILITY OF GST EXEMPTION TO THE DG SHIPPING APPROVED MARITIME
COURSES CONDUCTED BY MARITIME TRAINING INSTITUTES OF INDIA
A representation has been received regarding applicability of GST exemption to the Directorate General of Shipping approved maritime
courses conducted by the Maritime Training Institutes of India. The same has been examined and following is clarified.

Therefore, the Maritime Institutes are educational institutions under GST Law and the courses conducted by them are exempt from levy
of GST. The exemption is subject to meeting the conditions specified at Sl. No. 66 of the notification No. 12/ 2017- Central Tax (Rate),
dated 28-6-2017.

CA Aanchal Kapoor 79
 Case study

ABC ltd. an educational institute has following receipts.:-

Particulars Amount Exempt/
taxable
Receipts from boarding School (including Rs. 1400000 from residential dwelling service) 3000000 Exempt
Receipts from ‘Gyan Udhay’ an Industrial Training Institute affiliated to National Council of 200000 Exempt
vocational training
Receipts of ‘Lakshya’ an institute registered with DGET 100000 Exempt
Receipts from ‘Wizard’ a commercial coaching institute 80000 Taxable
Fees from employer for campus interview 400000 Taxable
Receipts from ‘ Concepts’ a coaching institute providing coaching in field of commerce( 140000 Taxable
certificate was awarded to each trainee after completion)
Receipts of Gurukul School providing education upto higher Secondary 500000 Exempt

CA Aanchal Kapoor 80
Rate of GST on education
services

CA Aanchal Kapoor 81
 GST Rate on education Services

SAC /HSN Code Description of Service Rate

9992 Education services( Except services in Entry No. 66 of N.N. 18% ( Notification 11/2017)
12/2017 CT Rate)
90 or any other Technical aids for education, rehabilitation, vocational training 5% ( Sr. Serial No. 257 of Schedule I
chapter and employment of the blind such as Braille typewriters, braille of
watches, teaching and learning aids, games and other the Notification No.1/2017-Central
instruments and vocational aids specifically adapted for use of Tax (Rate) dated 28th June, 2017)
the blind
9023 Instruments, apparatus and models, designed for 28 %/ Serial No. 191 of Schedule IV
demonstrational purposes (for example, in education or of the Notification No.1/2017-
exhibitions), unsuitable for other uses Central Tax (Rate) dated 28th June,
2017
999259 Specialized educational service 18%
999291 Cultural educational service 18%
999293 Commercial training and coaching services 18%

999294 Other education & education services 18%

CA Aanchal Kapoor 82
Registration

CA Aanchal Kapoor 83
 Registration

If an education Institution is providing only education as a service then fees

received from students is chargeable at NIL rate of GST and educational
institution is not required to register in GST.

But if educational institution is also giving ground on rent for functions or

sponsorship services, then they will be required to get themselves registered
in terms of sec. 22 or 24 of the CGST Act,2017. Aggregate Turnover(Sec. 2(6))
to be taken adding all Incomes whether Exempt or Taxable.

CA Aanchal Kapoor 84
Place of supply

CA Aanchal Kapoor 85
Place of Supply of Educational Services where the location of supplier of services and the location of the recipient of
services is in India
 12 (2) The place of supply of services, except the services specified in sub-sections (3) to (14),—
a) made to a registered person shall be the location of such person;
Location of Recipient Online Coaching Training
b) made to any person other than a registered person shall be,—
i. the location of the recipient where the address on record exists; and
ii. the location of the supplier of services in other cases.

 Section 12(6) of IGST Act, 2017 “The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific,
educational, entertainment event or amusement park or any other place and services ancillary thereto, shall be the place where the
event is actually held or where the park or such other place is located.” Location of Educational Institution

 Section 12(7) of IGST Act 2017 “The place of supply of services provided by way of,—
a. organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a
conference, fair, exhibition, celebration or similar events; or
b. services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events,—
i. to a registered person, shall be the location of such person; Location of Recipient
ii. to a person other than a registered person, shall beCAthe place where the event is actually held and if the event is held86outside
Aanchal Kapoor
Location of Event
Place of supply of Educational Services where the location of the supplier of services or the location of the recipient of
services is outside India

 13(2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the
recipient of services: Location of Recipient Online Coaching Training
Provided that where the location of the recipient of services is not available in the ordinary course of business, the place
of supply shall be the location of the supplier of services.

 Section 13(5) of IGST Act 2017,

“The place of supply of services supplied by way of
• admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a
• celebration, conference, fair, exhibition or similar events, and of services ancillary
• to such admission or organisation, shall be the place where the event is actually held.”

 Section 13(3)(b) of IGST Act 2017

• The place of supply of services supplied by way of requiring Physical Presence
• Where services are actually performed. CA Aanchal Kapoor 87
Case Laws

CA Aanchal Kapoor 88
[2022] 137 taxmann.com 4 (Gujarat)/[2022] 63 GSTL 45 (Gujarat)[18-02-2022]
GST : Term 'education' cannot be restricted to actual imparting of education
to students and it should be given a wider meaning to cover within its ambit
all matters relating to imparting and controlling education; supply of service
by way of conducting educational assessment examination to educational
institutions is exempt from GST
Educational services - Heading No. 9992 - Exemption - Whether supply of service to an educational institution by
way of conducting Assessment of Scholastic Skills Through Educational Testing (ASSET) is exempted from GST -
Authority for Advance Ruling (AAR) held that exemption is available in respect of ASSET exam service provided to
educational institutions whereas Appellate Authority had held that no exemption is available - HELD : Nature of
ASSET is examination conducted by school but outsourced to petitioner - Term 'education' cannot be given a
natural meaning by restricting it to actual imparting of education to students - Education should be given a wider
meaning which would cover within its ambit all matters relating to imparting and controlling education - ASSET is
an educational assessment examination taken at school and does not envisage any kind of coaching and/or training
of teachers or administrators, Term 'relating to' is to be given a wider and broader interpretation - Further,
exemption provision should be liberally construed in accordance with object sought to be achieved as provision is
to grant incentive for promoting education or otherwise which has some beneficial reason behind it - ASSET exam
service provided to educational institutions fall within purview of Notification No. 12/2017-Central Tax (Rate) -
Impugned order of AAAR being not sustainable, set aside - [Paras 18 to 22, 24 to 26] [In favour of assessee]
CA Aanchal Kapoor 89
APPELLATE AUTHORITY FOR ADVANCE RULINGS, WEST BENGAL Global Reach Education Services (P.) Ltd., In re [[2018] 96
taxmann.com 107 (AAAR-WEST BENGAL)]
Section 2(13) of the Integrated Goods and Services Tax Act, 2017 - Intermediary - Appellant promotes courses of foreign
Universities, finds suitable prospective students to undertake courses, and, in accordance with University procedures and
requirements, recruits and assists in recruitment of suitable students –
Question :- Whether appellant is to be considered as an 'intermediary', in terms of section 2(13) and, therefore, services of
appellant are not 'Export of Services' under GST Act, and are eligible to tax –
Answer:- Held, yes [Paras 23 & 24]
IGST : Where appellant promotes courses of foreign university in India, finds suitable prospective students to undertake
courses, and assists in recruitment of suitable students, appellant is to be considered as an intermediary in terms of section
2(13) and, therefore, services of appellant are not 'Export of Services' under GST Act, and are eligible to tax.

Promotes the courses Finds suitable

offered by university prospective students
in India

Foreign University

This is not Export of service. This is considered as intermediary services u/s 2(13) and
therefore liable to tax & Place of Supply is as
CA Aanchal per 13(8).
Kapoor 90
Emrald Heights International School, In re vs.[[2019] 109 taxmann.com 377 (AAR - MADHYA PRADESH)]
Classification of service - Madhya Pradesh Goods and Services Tax Act, 2017 - Educational conference – Heading No. 9992 [Education services] - Applicant-school
is a member of an association which is a charitable organization - Applicant and said association intend to enter into an agreement for hosting and managing
conference/gathering for students and staff of other member (participant) schools of said association –
• Many of member school are based outside India as per agreement, applicant is responsible to hold an educative conference engaging skilled personnel and
sufficient financial and material resources for planning conference, inviting participants, arranging accommodation, food etc. –
• Consideration for performing above mentioned functions would flow from participant schools in form of fee along with list of individual student and staff –
• Whether consideration received by applicant from participant schools would not be exempted under Entry No. 66 or Entry No. 1 or Entry No. 80 of
Notification No. 12/2017 - Central Tax (Rate) - Held, yes –
• Whether various services provided for organizing said conference shall be liable to tax at rate applicable to respective services - Held, yes [Para 8.1]
• GST : Where applicant-school and an association (a charitable organization), of which applicant is a member, intend to enter into an agreement for hosting
and managing an educative conference/gathering for students and staff of other member schools (many of which are based outside India) of said
association, consideration received by applicant from said schools in form of fee for participation of their students and staff would not be exempted under
Entry No. 66 or Entry No. 1 or Entry No. 80 of Notification No. 12/2017 - Central Tax (Rate).

Applicant school is hosting conference also for schools

outside India

This service is not covered by Entry No. 66 or 80 of N.N.

12/2017. Hence the same is not covered by exemption
CA Aanchal Kapoor 91
Attest Testing Services Ltd., In re vs. [[2019] 109 taxmann.com 366 (AAR - MAHARASHTRA)/[2019] 29 GSTL 528 (AAR MAHARASHTRA)/[2019] 76 GST 512
(AAR - MAHARASHTRA)
Classification of services - Maharashtra Goods and Services Tax Act, 2017 - Educational Services - Heading No. 9992 [Education Services] - Section 2(30) of the
Central Goods And Services Tax Act, 2017/Section 2(30) of the Maharashtra Goods and Services Tax Act, 2017 - Supply - Composite supply –
• Applicant is providing services, viz., conducting online examinations along with pre-exam management processes, post exam management processes
across different cities and examination centers –
• Whether services provided by applicant satisfy definition of 'composite services' in as much as it provides services to completely manage conduct of
examinations electronically like facilitation of online booking of examination slots by candidates, setting up questions based on question bank
management, conduction of online examinations in their authorized examination centers, invigilation and exam evaluation services, etc. - Held, yes –
• Whether services provided by applicant are naturally bundled with principal supply being conduct of examination and therefore, services supplied by
applicant are in nature of naturally bundled services - Held, yes –
• Whether thus, services provided by applicant are composite supply in which conduct of examination can be considered as principal supply and exemption
under Entry 66 of Notification 12/2017-Central Tax (Rate), dated 28-6-2017 will be available to applicant only when provisions mentioned therein are
satisfied by them - Held, yes [Paras 5 6] [In favour of assessee]
• GST: Where applicant is providing services, viz., conducting online examinations along with pre-exam management processes, post exam management
processes across different cities and examination centers, services provided by applicant satisfy definition of 'Composite Services' under section 2(30) in
which conduct of examination is principal supply and exemption under Entry 66 of Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017 will be
available.
Principal
supply
exempt.
So
Composite
also
exempt.
Applicant
CA Aanchal Kapoor 92
Arivu Educational Consultants (P.) Ltd., In re vs.[[2019] 110 taxmann.com 426 (AAR - KARNATAKA)/[2020] 77 GST 25 (AAR -
KARNATAKA)/[2020] 32 GSTL 353 (AAR - KARNATAKA)]
• Section 15 of the Central Goods and Services Tax Act, 2017 read with rule 33 of the Central Goods and Services Tax Rules, 2017
/Section 15 of the Karnataka Goods and Services Tax Act, 2017 read with rule 33 of the Karnataka Goods and Services Tax Rules, 2017 -
Supply - Taxable supply, value of - Applicant provides coaching, learning and training services in relation to under-graduate, graduate
and post-graduate degree, diploma and professional courses on a standalone bases to students –
• In this process, applicant collects certain amount as examination fee from students and remits same in bulk to respective institute or
college or university without any additional charges or profit element –
• Whether activity of collecting examination fee (charged by any university or institution) from students and remitting same to that
particular university or institution without any value addition to it is a service as a pure agent and hence value is excluded from
taxable value of applicant as per rule 33 - Held, yes [Para 9] [In favour of assessee]
• GST : Where applicant provides coaching, learning and training services and collects certain amount as
examination fee from students and remits same to respective college or university without any profit
element, activity of collecting examination fee is a service as a pure agent.

Remitting Collecting
exam fees to exam fees
institutes from students

As the exam fees is remitted to institute without charging any profit element, so it
is considered as service
CA Aanchal as pure agent
Kapoor 93
AUTHORITY FOR ADVANCE RULINGS, KARNATAKA Bangalore Printing & Publishing Co. Ltd., In re*[[2019] 110 taxmann.com 239 (AAR - KARNATAKA)]
Classification of services - Karnataka Goods and Services Tax Act, 2017 - Printing of question papers - Heading No. 9989 [Other manufacturing services;
publishing, printing and reproduction services; material recovery services] –
• Applicant is engaged in activity of printing of books, journals, question papers, calendars, etc. - It has received an order from State Government Institution
for printing of question papers for State Level Higher Secondary Examinations - Said Institution would supply to applicant only content
for printing and printing inputs including paper belong to applicant - Whether supply made by applicant would constitute supply of service falling under
Heading No. 9989 - Held, yes [Para 7][In favour of assessee]
• Classification of services - Karnataka Goods and Services Tax Act, 2017 - Printing of question papers - Heading No. 9992 [Education services] - Applicant is
engaged in activity of printing of books, journals, question papers, calendars, etc. - It has received order from State Government Institution
for printing of question papers for State Level Higher Secondary Examinations - Said Institution would supply to applicant only content
for printing and printing inputs including paper belong to applicant –
• Whether services supplied by applicant would be covered under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 - Held, yes [Para
7][In favour of assessee]
GST : Where applicant has received order from State Government Institution for printing of question papers for State Level Higher Secondary Examinations and
said Institution would supply to applicant only content for printing and printing inputs including paper belong to applicant, supply made by applicant would
constitute supply of services falling under Heading No. 9989
GST : Where applicant has received order from State Government Institution for printing of question papers for State Level Higher Secondary Examinations and
said Institution would supply to applicant only content for printing and printing inputs including paper belong to applicant, services supplied by applicant would
be covered under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017

Supplies content for printing question paper along with paper belonging to Govt. Institution

Service of printing question paper

Govt. Institution
Printing service provider

Covered by entry 66 of N.N. 12/2017,

CA Aanchal Kapoor Hence Exempt 94
[2019] 110 taxmann.com 361 (AAR - KARNATAKA) AUTHORITY FOR ADVANCE RULINGS, KARNATAKA Informatics Publishing Ltd.,In re*
Classification of services - Karnataka Goods and Services Tax Act, 2017 - Providing of access to online content to users - Heading No. 998431
[Online text based information such as online books, newspapers, periodicals, directories and like] –
• Applicant is in business of only providing access to articles published in various journals and papers to its subscribers - It has a portal
called J-Gate, which is a platform for searching various educational journals - It itself is not publishing any online journal, but only
maintaining a database of links to all journals –
• Links to articles are maintained in a metadata form and subscriber when accesses to platform can access to individual article published in
any of journal available in platform after reading catalogue of articles –
• Whether activity of providing of access to online content by applicant to its users is covered under Service Code No. 998431 and liable
to tax at 9 per cent CGST + 9 per cent SGST - Held, yes [Para 6] [In favour of revenue]
GST: Where applicant is in business of only providing access to articles published in various journals and papers to its subscribers and it has a
portal called J-Gate, which is a platform for searching various educational journals, and it itself is not publishing any online journals, but only
maintaining a database of links to all journals, activity of providing of access to online content by applicant to its users is covered under
Services Code No. 998431 and liable to tax at 9 per cent CGST and 9 per cent SGST

Providing access to articles published in various journals and

papers to its subscribers

Covered under SAC Code 998431 and liable to tax @ 18%

CA Aanchal Kapoor 95
 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA MAHALAKSHMI MAHILA SANGHA,IN RE [2018] 12 G.S.T.L. 463 (AAR- KARNATAKA)
Applicability of TDS under GST - catering services to educational institutions sponsored by State/ Central / Union territory - Sl. No. 66 of the Notification No.12/
2017-Central Tax (Rate) dated 28.06.2017 - Circular 65/ 39/ 2018 –
• HELD THAT:- The agreements for the supply of services are entered between the Heads of the Residential Schools and the applicant and the recipient of
service is hence, the Residential Schools.
• The nature of the contract is verified and found that the successful bidders have to prepare the food in the respective schools only and there is no provision
of providing food cooked outside the premises or from one school to another. Hence the applicant has to prepare the food in the school premises and
supply it to the students of the school for a monthly consideration. Further, it is seen that the students to whom the service is provided are from the Primary
School category. Hence the service is a catering service provided to an educational institution which is a primary school and hence is covered under the
Entry No.66 of Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 as amended from time to time and is exempted from the payment of GST.
The provision of tax deduction at source is applicable on the payment made to a supplier of taxable services and since the applicant is supplying exempt services,
the said provisions are not applicable to the payments made to him by the educational institutions.

Contract is to prepare the food in the

premises of school

School
caterer

The service is covered under entry 66 of N.N. 12/2017 Ct- Rate

CA Aanchal Kapoor 96
 AUTHORITY FOR ADVANCE RULING – MAHARASHTRA SIMPLE RAJENDRA SHUKLA, IN RE [2018] 93 taxmann.com 97/12 GSTL 463/68 GST
73 (AAR - MAHARASHTRA)
Levy of GST - activity of preparing students for entrance exams - whether the services related to providing the coaching for entrance
examination will come in the ambit of Goods and Service Tax? - applicant has argued that the word "Education" and "institution" has not
been defined in GST Act - N/N. 12/2017- Central Tax (Rate) dated 28/06/2017.

Held that: - The applicant runs private institute, Simmple Shukla's Tutorials and is engaged in providing the service of teaching to the
students of Class Xlth and Xllth science. This activity prepares the students for entrance examinations related to MBBS, Engineering and
other science related examinations. However the institution "Simmple Shukla's Tutorials" is in no way covered in the definition of Educational
institution as given in the above notification.

The private institute does not have any specific curriculum and does not conduct any examination or award any qualification recognized
by any law which would be covered in the above notification, The activity of applicant is not covered by the specific definition provided for
interpretation of exemption notification.
The education service provided in the case is taxable at the rate of 9 percent under CGST ACT and 9 percent SGST Act - question answered
in affirmative.

Prepares the students for entrance

examinations related to MBBS, Engineering and
other science related examinations.

Private institute does not have any specific curriculum and does not conduct
any examination or award any qualification recognized by any law. Thus not
CA Aanchal Kapoor 97
covered N.N. 12/2017
Commissioner of Service Tax, Delhi v. Indian Institute of Planning & Management[[2018] 92 taxmann.com 221 (New Delhi -
CESTAT)]
Classification of services - Section 65(27) of the Finance Act, 1994 - Commercial training or coaching centre - Assessee 'IIPM'
was engaged in conducting management courses leading to award of Certificate of Associate Fellow
in Indian Institute of Planning and Management (AFIIPM), Fellow Indian Institute of Planning and Management of IIPM and
also MBA, BBA Degrees of International Management Institute (IMI), Europe –
Question :- Whether assessee would fall under category of 'commercial training or coaching centre' as defined under
section 65(27) and was liable to service tax - Held, yes [Para 12] [In favour of revenue] GST/Service Tax : Where assessee
'IIPM' was engaged in conducting management courses leading to award of Certificate of Associate Fellow
in Indian Institute of Planning and Management (AFIIPM), Fellow Indian Institute of Planning and Management of IIPM and
also MBA, BBA Degrees of International Management Institute (IMI), Europe, it would fall under category of 'commercial
training or coaching centre‘]

Conducting management courses leading to award of Certificate of

Associate Fellow in Indian Institute of Planning and Management
(AFIIPM),

IIPM Assessee IIPM falls under the category of commercial coaching

CA Aanchal Kapoor 98
center. Hence liable for service tax
 AUTHORITY FOR ADVANCE RULINGS, KARNATAKA Emerge Vocational Skills (P.) Ltd., In re* [[2018] 97 taxmann.com 320
(AAR - KARNATAKA)]
Section 9 of the Central Goods and Services Tax Act, 2017 - Levy and collection of tax - General (NR) - Whether services
provided by an educational institution to its students, faculty and staff is exempt from tax vide entry no. 66 of Notification
No. 12/2017-Central Tax (Rate) dated 28-6-2017 - Held, yes - Whether thus, where assessee qualified as an educational
institution in so far as those courses for which affiliation had been obtained from University in State of Karnataka and for
which University curriculum was prescribed and qualifications recognized by law for time being in force was given after
conduct of examinations by such university, assessee was exempt from GST - Held, yes [Para 4] [In favour of assessee]

CGST: Services provided by educational institution providing degree courses to students under related curriculums is
exempt from GST

Curriculum was prescribed and qualifications recognized by law for time

being in force was given after conduct of examinations by such university,

Assessee was exempt from GST

CA Aanchal Kapoor 99
- AUTHORITY FOR ADVANCE RULING GUJARAT STATE EXAMINATION BOARD,IN RE, [2021] 125 taxmann.com 242/86 GST 241/49 GSTL 391
(AAR - GUJARAT)
Requirement of registration - examination to get admission for study at Rashtriya Military College, Dehradun etc. held by the State
Examination Board - activities of conducting various types of examinations - N/N. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended -
HELD THAT:- Notification no. 12/2017-Central Tax (Rate) dated 28.06.17 (Sr.No.1), as amended, clearly provides exemption to Services by an
entity registered under section 12AA of the Income-tax Act, 1961(43 of 1961) by way of charitable activities. However, the applicant do not
fall in the category of Charitable activities - The benefit of exemption is not available to the State Examination Board under entry no. 66 (b)(iv)
to the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 read with Notification No. 02/2018-Central Tax (Rate) dated 25.01.2018
as the exams conducted by the applicant are planned and conducted by the State Examination Board on its own accord and its not the
services provided to an educational institute - State Examination Board is liable for registration as it does not falls under Section 23(a) of
Central Goods and Services Tax Act, 2017 - State Examination Board is liable for registration as provided under Section 22 of Central Goods
and Services Tax Act, 2017.
Whether the applicant is required to be registered under the Act. - HELD THAT:- Yes, the applicant is required to be registered under the Act.
Whether any tax liability arises from the work done by it? - HELD THAT:- Yes, the amount will be taxable.

Service provider SERVICE Service Recipient

Any Person • admission to, or conduct of examination by, •Educational Institution
such institution

Benefit of exemption is not available to the State Examination Board under entry no. 66 (b)(iv) to the Notification No. 12/2017-Central Tax
(Rate) dated 28.06.2017 read with Notification No. 02/2018-Central Tax (Rate) dated 25.01.2018 as
the exams conducted by
the applicant are planned and conducted by the State Examination Board on its own accord
and its not the services provided to an Educational Institute.
CA Aanchal Kapoor 100
Sr. No. Question Answer
1 The activities of conducting various types of examinations : for getting job of teacher State Examination
for pre primary, primary and secondary school, for getting job as a teacher in Board is liable for
Government/Grant-in-Aid School in standard 9 to 12, for getting a job as a Principal in registration as
Grant–in-Aid School, for being confirmed in service, for getting higher Scale, for provided under
getting promotion, for getting self employment as a painter, for getting self- Section 22 of
employment, for getting jobs in various other fields, for scholarships, examination to Central Goods and
get admission for study at Rashtriya Military College, Dehradun etc. by the State Services Tax Act,
Examination Board, Gandhi nagar are not exempt under Notification No. 12/2017- 2017.
Central Tax (Rate) dated 28.06.2017, as amended.
2 Whether the applicant is required to be registered under the Act. Answered in
Affirmative.
3 Whether any tax liability arises from the work done by it? Answered in
Affirmative.

CA Aanchal Kapoor 101

AUTHORITY FOR ADVANCE RULING, WEST BENGAL, LEPROSY MISSION TRUST INDIA, IN RE [2020] 117 taxmann.com 501/80 GST 463 (AAR
- WEST BENGAL)
BILL EDGAR MEMORIAL VOCATIONAL TRAINING CENTRE(BEMVT)
Exemption from GST - service of providing vocational training courses at Vocational Training Centre, Bankura - applicability of entry no 64 or
66 of Notification 12/2017 - Central Tax (Rate) dated 28/06/2017 (State Notification No. 1136-FT dated 28/06/2017), as amended time to
time - HELD THAT:-
 The applicant is not the Government or local authority. Entry No. 64 of the Exemption Notification is not, therefore, applicable. A
reference is made to the services provided by the applicant as a project implementation agency under the Deendayal Upadhyaya
Grameen Kausalya Yojana. It is exempt under Entry 71 of the Exemption Notification. However, the applicant provides no evidence that
BEMVT is acting as a project implementation agency under the above scheme.
 Clause h(ii) of the Exemption Notification defines an “approved vocational course” as a modular employable skill course, approved by
NCVT and run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship.
BEMVT is registered with DGET and its courses on formal trade skills of diesel mechanic, welder and sewing technology, as mentioned
in the Table in para 2.2 above, are approved by NCVT. It is, therefore, imparting education as a part approved vocational education
courses.

The applicant is, therefore, an educational institution in terms of clause 2(y)(iii) of the Exemption Notification, and its supplies to the
CA Aanchal Kapoor 102
students, faculty and staff relating to the courses imparting skills of diesel mechanic, welder and sewing technology are exempt in terms of
 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA ORIENT PRESS LTD., IN RE [2019] 106 taxmann.com 240/26 GSTL
369 (AAR - MAHARASHTRA)
• Classification of supply of services - rate of tax - Printing of Pre-examination items - Printing of Post-examination items - Scanning
and
processing of results of examinations - exempt supply or not - business of providing the services of printing
of security documents to various clients like Government Authorities and agencies, Banks, Educational
Boards / Institutions and Private Companies.
• Supply of service of Printing of examination items like question papers OMR sheets (Optical Mark Reading), Answer booklets for
conducting of an examination by the educational boards or institutions - exempt services or not - N/N. 12/2017 - CT (Rate), dated 28th
June, 2017 as amended - Circular No. 11/11/2017-GST dated 20.10.2017 - HELD THAT:- As per under Entry No. 66 of the Notification No.
122017 - C T (Rate), dated 28th June, 2017 as amended, services provided to an educational institution, by way of Services relating to
admission to, or conduct of examination by, such institution falls under Heading 9992 (Education Services and exempted from payment
of GST. Such services are exempted only if they are, in the subject case, related to conduct of examination by such institution.
• The question papers, OMR sheets (Optical Mark Reading), answer booklets are very essential and necessary requirements to conduct any
examination. To print question papers the content i.e. the questions will be provided by the institution conducting the examination.
The contents of the OMR sheets and answer sheets will also be provided accordingly by the institution - in the subject case there is a
supply of services and since the same are provided to educational institutions, the same shall be classified under Heading 9992 and
will be exempted from payment of GST vide Entry No. 66 of the Notification No. 12/2017 - Central Tax (Rate), dated 28th June, 2017 as
amended.
• Whether supply of service of Printing of Post examination items like marks card, grade card, certificates to educational boards (up to
Higher Secondary) after scanning of OMR Sheets and processing of data are also exempted under the said Notification? –

• HELD THAT:- Conduct of any examination by an educational Institute includes both pre examination works, actual conduct of the exams
and post-examination works. Hence for reasons mentioned in para no. 5.4 above we hold that such supply is also a supply of services and
classifiable under Heading 9992 and will be exempted from payment of GST vide Entry No. 66 of the Notification No. 122017 - Central Tax
(Rate), dated 28th June, 2017 as amended. We do not agree with the
CA Aanchal jurisdictional officer who has opined that the said supply
Kapoor 103 is a
supply of goods and not services.
 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, SECURITY AND INTELLIEGENCE SERVICES (INDIA) LTD., IN RE, [2019] 107
taxmann.com 354/75 GST 777 (AAR - MAHARASHTRA) Security Services
Educational Institution - services provided to Visvesvaraya National Institute of Technology, Nagpur - exemption under Serial No. 66 of
Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017 - Rate of tax.
Whether the services provided to Visvesvarayya National Institute of Technology, Nagpur will qualify for exemption under Serial No. 66 of
Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017, considering it to be an educational Institution? - HELD THAT:- The
applicant is of the opinion that the said Sr.No. 66 is not applicable in their case but VNIT has informed them that GST is not applicable on
security services provided by the applicant to them. As per Sr.No.66 (b) (iii) security services or cleaning services or housekeeping services
supplied to an educational institution attracts NIL rate of GST. Hence to avail of the benefit of Sr. No.66 mentioned above in the subject
case, since the security’ services are provided by the applicant to VNIT, the latter must fall under the definition of an ‘educational
institution’.
VNIT as per the submissions made by the applicant is not engaged in providing preschool education and education up to higher secondary
school or equivalent.
Since VNIT as a technical institute is engaged in imparting under-graduate courses, post-graduate courses and Ph. D programs in the field
of engineering, architecture and science thereby being engaged in imparting education as a part of a curriculum for obtaining a
qualification recognised by law for the time being in force, it would get covered under the definition of “educational institution” vide
clause (ii) mentioned above and therefore it is seen that the security services as in the subject case are provided to an educational
institution i.e. VNIT.
The applicant has been given the status of a Deemed University by the University Grants Commission. The UGC was formally established 1956
as a statutory body of the Government of India through an Act of Parliament for the coordination, determination and maintenance of
standards of university education in India.
The proviso to Sr. No. 66 mentioned above very clearly states that only services provided to an educational institution which provides
services by way of pre-school education and education up to higher secondary school or equivalent, will be exempt. In the subject case the
applicant is not providing services, as an educational institution, by way of pre-school education and education up to higher secondary
school or equivalent. Hence Security services provided in the instant case will not be exempt from payment of GST.
CA Aanchal Kapoor 104
- AUTHORITY FOR ADVANCE RULINGS, ANDHRA PRADESH : MASTER MINDS, IN RE [2020] 117 taxmann.com 824/82 GST 167
(AAR - ANDHRA PRADESH)

Ques:- Whether the services of supply of service of education as per the curriculum prescribed by the statutory authorities/ government to the
students of the applicant tor obtaining qualifications/ certificates of CA-Foundation, CA-Inter, CA-Final, CMA (ICWA)-Foundation, CMA-Inter, CMA-
Final and Intermediate duly recognized by the respective statutory authorities/ government are exempted under Notification NO.12/2017-CT (Rate)
dt.28.06.2017 (entry No.66(a)), as amended or Not?

Ans:- In the instant case, the coaching or training service provided in respect of the courses pertaining to CA (Inter & Final) and ICWA (Inter & Final)
does Not fall under clause (i) of the above said definition, as the same is Not related to pre-school education and education up to higher secondary
school or equivalent. Similarly, the service provided by the applicant also does Not fall under clause (iii), as the same is Not related to imparting of
education as a part of an approved vocational education course (which is generally a Non-academic course and a specific trade / vocation oriented
course) - In the instant case, the coaching or training provided by the applicant is for preparing the students for wTiting/appearing CA(Inter & Final)
and ICWA (Inter & Final) Exams conducted by ICAI/ ICWAI. The said coaching or training per se does Not lead to grant of a certificate or diploma or
degree or qualification which is recognized by any law. It only aims at giving a better preparation to the students and improves their chances in the
examination. It is similar to any other coaching or training given in respect of competitive / entrance examinations such as IIT, EAMCET etc.
It is pertinent to mention that the coaching or training as imparted by the applicant is neither mandatory Nor sine qua Non to the students appearing
for CA / ICWA examination. Students, who prepare on their own, can also appear for these examinations and qualify basing on their performance.
Hence, as stated supra, the coaching or training imparted by the applicant is only a facilitation / improvisation of the preparation for the said exams
and can not be considered as a coaching/training leading to grant of certificate, qualification etc. recognized by law - the coaching or training service
provided by the applicant to the aspirants of CA-Foundation, CA-lnter, CA-Final, CMA (ICWA)-Foundation, CMA-Inter, CMA-Final and Intermediate is
Not the service provided by means of ‘education as a part of curriculum that has been prescribed for obtaining a qualification prescribed by law’.
Hence it cannot be said that the coaching / training given by the applicant to CA aspiring students (for appearing and qualifying in the examinations)
would lead to grant of certificate/qualification recognized by law. Therefore, the service rendered by the applicant is Not a service by way of
‘education as a part of curriculum for obtaining a qualification recognized by any law for the time being in force’.

CA Aanchal Kapoor 105

The rates of GST to be collected towards various
activities of the University are as follows

CA Aanchal Kapoor 106

TDS Provisions can also come into picture depending on facts.
CA Aanchal Kapoor 107
FAQ

CA Aanchal Kapoor 108

 FAQ
FAQ – What will be the treatment in case of Bundled Supply or Mixed Supply of Service by an Education Institution e.g. Boarding & Lodging Service by
Boarding Schools?
Reply – Boarding schools provide service of education coupled with other services like providing dwelling units for residence and food. This may be a
case of bundled services if the charges for education and lodging and boarding are inseparable. Their taxability will be determined in terms of the
principles laid down in section 2(30) read with section 8 of the CGST Act, 2017. Such services in the case of boarding schools are naturally bundled and
supplied in the ordinary course of business. Therefore, the bundle of services will be treated as consisting entirely of the principal supply, which means
theservice which formsthe predominant element of such a bundle. In this case since the predominant nature is determined by the service of
education, the other service of providing residential dwelling will not be considered for the purpose of determining the tax liability and in this case the
entire consideration for the supply will be exempt.
Let’s take another example where a course in a college leads to dual qualification only one of which is recognized by law. Would service provided by
the college by way of such education be covered by the exemption notification? Provision of dual qualifications is in the nature of two separate
services as the curriculum and fees for each of such qualifications are prescribed separately. Service in respect of each qualification would, therefore,
be assessed separately.

If an artificial bundle of service is created by clubbing two courses together, only one of which leads to a qualification recognized by law, then by
application of the rule of determination of taxability of a supply which is not bundled in the ordinary course of business, it shall be treated as a mixed
supply as per provisions contained in section 2(74) read with section 8 of the CGST Act, 2017. The taxability will be determined by the supply which
attracts highest rate of GST. However incidental auxiliary courses provided by way of hobby classes or extra-curricular activities in furtherance of
overall well-being will be an example of naturally bundled course, and therefore treated as composite supply.
One relevant consideration in such cases will be the amount of extra billing being done for the unrecognized component viz-a-viz the recognized
course. If extra billing is being done, it may be a case of artificial bundling of two different supplies, not supplied together in the ordinary course of
business, and therefore will be treated as a mixed supply, attracting the rate of the higher taxed component for the entire consideration.

FAQ –Whether Institutions providing Degree under Foreign Laws but eligible for Equivalence Degree by AIU will be eligible for exemption?
Reply –Involves question of Law.

CA Aanchal Kapoor 109

Taxability of sale of goods or
services

CA Aanchal Kapoor 110

 Taxability of goods

Taxable at normal
Uniform rates

Stationery Taxable

Printed Books Exempt

Printing of
question paper, Goods Service
OMR Sheets

CA Aanchal Kapoor 111

 Taxability of services Fees charged from Exempt
students
Annual function/ sports
Amount charged
function Taxable
from others

Services received by
education institution of
Exempt
printing question paper,
OMR sheets

Security/ Housekeeping/
cleaning services Edu. Inst. Exempt
under 2(y)(i)

Manpower supply to Edu. Taxable

Inst. under 2(y)(i)

Taxable as SAC
Day Care Services by
999351
Educational Institution
Hostel Exempt

Canteen Income to School Exempt

CA Aanchal Kapoor 112
(For Students)
Classification Issue
 Principles of classification as a medicine

3003/3004 – Medicaments for therapeutic or prophylactic uses …..[12%]

Determinant factors in classification in above entry

• Curative effect (therapeutic use) or Preventive effect (prophylactic use) :
• Period of usage i.e., to be used for a limited period or regularly
• Prescription by a medical practitioner
• License to manufacture, store and sell by FDA
• Reference to Pharmacopoeia or authoritative books
• Trade parlance, i.e., how it is known in the market
• Certificate by the technical experts or authorities.
• Whether put up in measured doses or not?
 Medicament vs Cosmetic – Judicial Interpretation

• 3003 90 – Medicine [12%] Vs Entry 3305 - Preparations for hair [18%]

• Khandelwal Drug Agencies (Raj HC) (STR Case No. 358 of 1999 [2007] RD-RJ 3199 (6 July 2007)): Swad having
therapeutic value is medicine though it is sold in tea stall or betel shop.
• Global Tele Mall–MP HC-Hair (CEA No.102/2017) wash/shampoo made from ayurvedic ingredients having
therapeutic quality classifiable as Ayurvedic Medicine. CEA No.102/2017
• Marico Industries Ltd. -SC – Mediker (W. P. No.21702/2017 & others)used for anti-lice treatment is a drug
because of its medicinal effect. Once it is a drug, it cannot be shampoo
• • Ciens Laboratories SC (CIVIL APPEAL NO. 6988 OF 2003) : The product having therapeutic value sold without
prescription is medicine. If a product’s primary function is “care” and not “cure”, it is not a medicament.
• Plethico Pharmaceutical Ltd (Excise Appeal No. E/766/2010- Ex (DB): Percentage of active ingredient is not
material. Plethico byte’ tablet contains ‘mulethi’ which acts as a therapeutic agent, it is medicament irrespective of
small value of ingredient.
 Medicament vs Cosmetic – Judicial Interpretation

• CCE v. Davo Laboratories [2017] 358 E.L.T. 271 (Tribunal Delhi) – Delhi Tribunal: Mere manufacture under licence
from Drug authorities has no relevance for classification. It is the common/popular description of product, length
of usage of the product, primary object of curing or caring which determine classification.
• B P L Pharmaceutical Ltd. v. Collector of Central Excise [1995] 1995 taxmann.com 454 (SC): Selsun’, is an anti-
dandruff preparation containing 2.5% selenium sulfide which is full therapeutic limit permissible as per
pharmacopoeia. It is manufactured under Drugs Licence, certified by Food and Drugs Administration as a medicine.
• Common parlance: Wherever tariff is not clear, classification based on how the said product is known in the
market. To be preferred over scientific meaning, unless specifically provided.
• CCE v. Sharma Chemical Works[[2003] 2003 taxmann.com 1240 (SC) : Use by customers is the main criteria for
classification:
• Prescription is not mandatory to classify as medicine:
• All medicines must have curative or preventive values but all articles having some elements of curative or
preventive values need not be medicines. Consumer perception is very important
 Hand Sanitizer – Classification

• Trade parlance only when heading not technical.

• Chapter 30/38 (disinfectant) - technical hence, trade parlance cannot be applied.
• Alcohol based sanitizers with 70% alcohol is medicament as;
- Has therapeutic or prophylactic values
- APIs are solutions used to prevent disease/antiseptic agents.
- FDA license/Quality control testing procedure prescribed in D&C Act/FDA certificating goods as
pharmaceutical/Legal Metrology Act applicable
- ICPA Health Products P. Ltd. v CCE [2004] 2004 taxmann.com 745 (SC) – cleaning wounds solutions is
medicament
- Circular No. 7/92-CX 3 – disinfectant manufactured as drug – classification in Chapter 38 only if Chapter 30 not
applicable.
Adverse Advance Rulings by department
 Disclaimer

The views expressed are solely of the author and the content of this document is solely for
information purpose and not to be construed as a professional advice. In cases where the reader
has any legal issues, he/she must in all cases seek independent legal advice.

CA Aanchal Kapoor 118

For More Information, Visit: https://taxmann.com/

CA Aanchal Kapoor 119