CA. Amit Daga
(Finance Controller CA. CS. CFA. CIFRS. M.COM. )
(9017 Points)
Replied 26 December 2007
Service tax on commercial training and coaching centres was introduced with effect from July 1, 2003. The gross amount charged for services rendered by them shall be chargeable to service tax.
As per Section 65(26), commercial training or coaching means any training or coaching provided by a commercial training or coaching centre.
Two conditions must be satisfied to come within the ambit of this definition: One, the institution should be a commercial concern and, two, it should impart any training or coaching.
This may relate to imparting certain skills, knowledge or lessons on any vocation or subject. Such centres should provide coaching or training and not merely offer certain degree or diploma courses.
Coaching includes private tuitions, specialised training or teaching or instruction training — that is, the action of teaching a person a particular skill or type of behaviour.
As per Section 65(27), a commercial training or coaching centre is a place where training or coaching is provided to trainees. Such a centre should operate on a commercial basis.
It would include vocational training institutes, coaching centres and private tutorials. Such centres should provide commercial training or coaching for imparting skills, knowledge or lessons in any subject or field with/without issuance of certificate. It also includes coaching or tutorial classes.
In light of the above, it is advised that you should ascertain whether the certificate or diploma being issued by this college is recognised in law, that is, if this college and its courses are approved by any regulatory agency (which normally is the case), then perhaps there would not be any liability of service tax on such college.
Moreover, the service tax is payable on coaching, not on formal education leading to degree/diploma.
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