The Gujarat Authority for Advance Ruling (AAR) has held that supplementary academic coaching / extra tuition provided by a private coaching institute to school students of Standards 5 to 12 is not, merely because it relates to school subjects, treated as services by an “educational institution” within paragraph 2(y) of Notification No. 12/2017-Central Tax (Rate). Where the provider is not an “educational institution” as defined, the exemption under Entry 66 is unavailable, and the service is classifiable under SAC 999293 as “commercial training and coaching services,” taxable at 18%.
The AAR ruled that the academic coaching services provided by Friends Classes, Surat to students of Standards 5 to 12 are covered under “Education Services” at Sr. No. 30 of Notification No. 11/2017-Central Tax (Rate), fall under Entry No. 599 / Service Code 999293 as “commercial training and coaching services”, and are liable to GST at 18%.
The Division Bench comprising Vishal Malani (CGST Member) and Sushma Vora (SGST Member) referred to Entry 66 of Notification No. 12/2017-Central Tax (Rate), which grants exemption, inter alia, to services provided by an educational institution to its students, faculty and staff.
The Authority treated the applicant’s activity as supplementary education, meaning additional instruction or support beyond mainstream schooling, and noted that the applicant itself had stated that students join these extra tuition classes for more practice, conceptual learning and better results. It observed that such supplementary education is essentially extra tuition where students receive personalized academic support, doubt-clearing, structured exam preparation, and customized study materials.
On that basis, the Authority held that the applicant’s services are neither pre-school education and education up to higher secondary school or equivalent, nor education as a part of a curriculum for obtaining a qualification recognised by law, nor education as a part of an approved vocational education course.
Since the applicant was found not to be covered by the definition of “educational institution”, the exemption under Entry 66 was held to be unavailable. The Authority then classified the activity under Heading 9992, specifically Group 99929 and Entry 999293 – “Commercial training and coaching services”, attracting GST at 18% (9% CGST + 9% SGST).
Briefly, applicant, M/s. Sanjaykumar Ishwerlal Sadadiwala, proprietor of Friends Classes, Surat, is registered under GST and provides academic coaching to students of Standards 5 to 12 following the GSEB/CBSE curriculum. The coaching is described as supplementary education in subjects taught in school to help students improve academic performance. Page 1 Page 1
The applicant sought an advance ruling on whether these coaching services are exempt under Entry 66 of Notification No. 12/2017-CTR as “education services” or are taxable at 18% under SAC 999293 as “commercial coaching services.” Page 2
In support of exemption, the applicant stated, among other things, that the classes had been conducted since 1 July 1984, that students require more practice and conceptual learning beyond school education, and that tax should not apply to educational institutions serving students up to 12th standard.
Appearances:
Bhavesh D. Saraiya, C.A., for the Applicant
