Service tax on auxiliary educational services by school

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Anuj Goyal

21 Points Posted on 08 March 2014

Hi,

After issuance of amendment notification in mar 2013 there is amendment made in clause related to auxiliary educational services and 'by' word had been removed from by the amendment notification. soon after many school started getting notices, summons to pay service tax on transport services provided by schools to their students and staff. However same is appear to be mischievious amendment. Later Ministry of finance moved a circular stating that all related educational services are also exempt from service tax. however said circular gave example of case where only "provided to" was explained and circular remain silent on "provided By " case. Due to this ambigous circular the issue is still controversial and due to this department is adament to impose service tax on auxiliary educational services provided by School.

Please help me how one can prove that there is no liability to pay service tax auxiliary educational services provided by School considering existing legal framework?

Replies (2)

Sunil Kumar

Indirect Taxation

1146 Points Posted on 08 March 2014

Dear anuj The query based upon point no 9 of exemption notification no 25/2012 which clearly state that SERVICES PROVIDED TO AN EDUCATIONAL INSTITUTIONS IN RESPECT OF EDUCATION EXEMPTED FROM SERVICE TAX BY WAY OF : a) Auxiliary educational service or b) Renting of immovable property Analysis it means that services TO educational institutions in relation to education by way of auxiliary educational service it means that auxiliary service for education e.g. admission related service, exam related service, transportation related service for students and faculty. And service provided in relation to renting of immovable property To Educational institutions are exempted. Note that renting by educational institutions are not exempted

Manoj Agarwal

Service Tax Consultant Rourkela Service

2755 Points Posted on 10 March 2014

Dear Anuj Ji, This is really a contentious issue. In my view, the service mentioned by you, prima facie, seems to be exempted. You can email me the facts, for greater clarity.