31 October 2012
Does a Central Government Autonomous body(Higher Educational Institution)imparting training or extending their services to Colleges in the college premises attract Service Tax and if so date of payment of the tax.
i.e. The College hires the Autonomous Body to train lecturers in their (College) premises for some consideration. Does this attract Service Tax. Audit has raised objection that SERvice tax is to be paid.
I am of the opinion since it is a Central Government Autonomous body the institute is exempt from paying the tax.
Further in case the Service has been collected but it is found that the institute is not taxable, then how to account the tax thus collected.
I shall be thankful for a reply asap as if it is to borne by the institute,iti has to be paid before 5th if I am right...
14 July 2024
In the scenario you've described, where a Central Government Autonomous body (such as a Higher Educational Institution) is providing training services to colleges on their premises for a consideration, here’s the clarification regarding the applicability of Service Tax (now GST):
### Applicability of Service Tax (Now GST):
1. **Service Tax (Now GST) Applicability:** - Generally, services provided by a Central Government Autonomous body are exempt from Service Tax (now GST) under certain conditions specified in the Service Tax (now GST) laws. - However, this exemption depends on the nature of the service provided and whether it falls within the specific exemptions granted to such institutions.
2. **Exemption Criteria:** - The Service Tax (now GST) laws provide exemptions for services provided by educational institutions. These exemptions are intended to promote the educational activities of such institutions. - If the training services provided by the Autonomous body to colleges are considered as part of their educational activities and are essential for their functioning, they may qualify for exemption from Service Tax (now GST).
3. **Audit Objection:** - If an audit has raised an objection and is asserting that Service Tax (now GST) is applicable, it’s crucial to carefully review the specific nature of the services provided and the legal provisions. - Auditors may sometimes overlook exemptions or misinterpret the applicability criteria, so it's important to provide documentation and legal basis for claiming exemption if applicable.
4. **Handling Tax Collected Incorrectly:** - If Service Tax (now GST) has been collected incorrectly due to a misunderstanding or incorrect interpretation of the law, the tax collected should be refunded to the colleges. - The process of refunding incorrectly collected Service Tax (now GST) involves filing a refund claim with the tax authorities along with supporting documents.
5. **Tax Payment Due Date:** - If Service Tax (now GST) is determined to be applicable and payable, it should be paid to the government within the prescribed due dates. - Under GST, typically payments are due monthly or quarterly depending on the turnover of the institution. The due date is generally the 20th of the subsequent month (for monthly filers) or the end of the quarter (for quarterly filers).
### Conclusion:
- **Exemption Eligibility:** The Autonomous body may be exempt from Service Tax (now GST) for services provided if they fall under educational activities exemptions. - **Refund of Tax Collected:** If Service Tax (now GST) has been collected incorrectly, it should be refunded to the colleges after due verification and filing of a refund claim. - **Due Date for Payment:** If Service Tax (now GST) is applicable and payable, ensure timely payment to avoid penalties.
For specific advice tailored to your institution’s situation and to handle the audit objection effectively, it’s recommended to consult with a tax advisor or GST consultant who can provide detailed guidance based on the current GST laws and exemptions applicable to educational institutions.
CAclubindia
