Service tax circular no 172/7/2013

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Querist : Anonymous

Querist : Anonymous (Querist)

26 October 2013 Whether educational auxiliary service provided 'BY' the educational institution is taxable. What difference it would make if such service is provided 'TO' the educational institution. Please answer me in the light of Recent Circular no 172/7/2013 dated 19th sep, 2013. Thank You

Nikhil Kaushik

Nikhil Kaushik (Expert)
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27 October 2013 Services TO educational institution as defined “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge – enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution;" are exempt from service tax.

Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2013 Thank u sir. But please clarify whether auxiliary educational service provided 'BY' educational institution is taxable

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 The clarification you're referring to is covered under Circular No. 172/7/2013 - ST dated 19th September, 2013, and it provides crucial guidance on the taxability of auxiliary educational services both provided to and provided by educational institutions.

✅ Summary of Circular No. 172/7/2013-ST:
📌 1. Auxiliary Educational Services PROVIDED TO Educational Institutions:
Exempt from Service Tax under Notification No. 25/2012-ST, entry 9.

Examples:

Transportation of students

Catering (including mid-day meals)

Security or housekeeping

Conduct of exams

Admission-related services

These are considered support services essential to the functioning of an educational institution, hence exempt when received by the institution.

📌 2. Auxiliary Educational Services PROVIDED BY Educational Institutions:
NOT taxable, because services provided by educational institutions to students, faculty, or staff are entirely exempt from service tax.

This includes:

Course content development

Teaching

Skill enhancement

Library use

Any support service by the institution to its students or staff

💡 Important Distinction:
Service Type Provided To Educational Institution Provided By Educational Institution
Auxiliary Educational Service ✅ Exempt under Notif. 25/2012-ST ✅ Exempt – covered as education services
Non-educational Support Services (e.g. facility mgmt) ❌ Taxable ✅ Exempt (if to students/faculty/staff)

🔍 Conclusion:
✅ Auxiliary educational services provided by an educational institution are not taxable.

These are considered part of the overall exempt educational service, especially when provided to students, faculty, or staff.

This is consistent with the government’s policy to exempt core education and its direct support services from service tax.

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