No service tax leviable on coaching provided to students in respect of competitive entrance examination for getting admission in Engineering and Medical Colleges: CESTAT [Read Order]

The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that no service tax is levied on coaching provided to students for competitive entrance examinations to gain admission to engineering and medical colleges. The appellant, Chhatrapati Shikshan Sanstha, is a Trust registered under the Societies Registration Act, 1860, operating various schools and colleges in and around Latur. It also imparts coaching for competitive exams like MPSC, UPSC, IIT-JEE, AIEEE, MHT-CET, etc. The department claimed the services provided by the appellant were taxable under “Commercial Training or Coaching Services” and “Renting of Immovable Property Service.”

The appellant settled the service tax issue under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, in response to a show cause notice. A subsequent notice dated 6.04.2018 raised a demand against the appellant for the period from April 2015 to June 2017, leading to confirmation of duty, interest, and penalty under Section 78 of the Finance Act, 1994.

In line with Senior No. 9 of Notification No. 25/2012-ST dated June 20, 2012, the appellant filed an appeal with the Tribunal, asserting exemption for services provided by educational institutions to students, faculty, and staff. Makarand P. Joshi, Counsel for the appellant, argued that educational services are exempt, not limited to any particular type. Piyush Barasu, counsel for the respondent, contended that commercial coaching by the appellant for competitive exams with additional fees isn’t covered under “Auxiliary Education Service.”

The two-member bench, Dr. Suvendu Kumar Pati (Member – Judicial) and Anil G. Shakkarwar (Member – Technical), relied on the decision in M/s. Shri Chaitanya Educational Committee Vs. CC, CE & ST, stating that the definition of “educational institution” in Section 66D of the Finance Act, 1994, exempts such activities from service tax. Consequently, the bench allowed the appeal filed by the appellant. To Read the full text of the Order

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