Service tax registration & its payment applicability ...???/

This query is : Resolved

Santosh Babulal Varma (Querist)
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16 April 2016 Is service tax is applicable to individual proprietor concern if he provide education to school student (status Trust (AOP)) and receiving fees as his income from the school exceeding Rs. 10 lacs in a financial year.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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17 April 2016 Teaching in a school or college recognized by the UGC, affiliated to State / Central Boards is exempt from service tax. However, if the entity runs a tutorial service, charges fees which is not paid the said school / college, then his service is a taxable service and he is liable to pay service tax on his collection.

It appears that in your case, the person is rendering the service to the school though not a teacher on the school's payroll (e.g. additional classes for the students) and it is the school that pays him the fees per student from its funds. In this case no liability arises to service tax on the person concerned.

Santosh Babulal Varma

Santosh Babulal Varma (Querist)
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18 April 2016 Thanks for the valuable reply.....however Sir i needed more clearification on it hence case is depicted as under:
School (Trust) has started a new unit as science schooling for 11th & 12th students and accordingly trust has hired a person n given to him all teaching & administrative work under a understanding that u will collect fees from the student of this new unit on behalf of trust n do all the necessary expenses, activities & other thing to run the unit. And at the and of the year net profit of the new unit we will share equally. My client receipts is share of profit n this is above Rs, 10 lac. received from the trust. Hence my query is weather the service tax is applicable to my client or not.... ???

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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19 April 2016 Once again - if the Recognized School has started the new unit and issues receipts in its own name, then the share of profit of your client is not a taxable service, since he is not running a tutorial / coaching centre. He renders his services as a teacher to the trust (Recognized School). Such teaching services are exempt from service tax.

Santosh Babulal Varma

Santosh Babulal Varma (Querist)
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11 May 2016 Thank you Suresh Sir...!!
It means he is not liable to service however if he will running coaching classes than that is chargeable to service tax.....????

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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11 May 2016 That is right - the fees should be collected by an association connected to recognized Boards or Universities - such fees is not subject to tax. However if the fees is collected by a private organization / person for giving coaching and is not a recognized body to grant degrees / school leaving certificates, then such fees is subject to service tax.

Santosh Babulal Varma

Santosh Babulal Varma (Querist)
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17 May 2016 Thank you so much Ramaswamy Sir for your valuable reply.

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