CESTAT: Educational Services Exempt Under Section 66D; Extended Period Cannot Be Invoked Without Wilful Suppression

The CESTAT has ruled that educational services forming part of a curriculum leading to a recognised qualification are exempt from service tax, even if not provided directly by a university. However, skill-development courses under PMKVY were not exempt as the provider was not an authorised NSDC partner. The Tribunal also set aside demands for extended periods, stating that wilful suppression of facts to evade tax was not proven.

The first issue concerned skill-development courses conducted under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). The appellant claimed exemption under Para 9A of Notification No. 25/2012-ST. However, the Tribunal found that the appellant was providing services to Globsyn Skill Development Pvt. Ltd., which was an approved NSDC training partner, whereas the appellant itself was not directly an authorised NSDC partner. Therefore, the Tribunal held that the appellant was not eligible for the exemption under Para 9A(iv)(c) and upheld service tax of ₹47,100 for this portion, for the normal period, if any.

The second issue related to distance-learning/degree courses conducted for Suresh Gyan Vihar University. The Tribunal held that Section 66D(l)(ii) exempts education forming part of a curriculum leading to a qualification recognised by law. Importantly, the provision does not require the service to be provided by a University itself. Since the appellant was providing education to the university in relation to recognised qualifications, the Tribunal allowed the exemption and set aside the service tax demand of ₹34,783.

On the question of the extended period of limitation, the Tribunal observed that the show cause notice and subsequent proceedings did not establish wilful suppression with intent to evade tax. The fact that the department subsequently accepted documents submitted by the appellant and reduced the original demand from ₹17.59 lakh to ₹81,843 also supported the conclusion that there was no wilful suppression. Accordingly, the extended-period demand was set aside.

Final Ruling

• Service tax demand relating to Globsyn Skill Development Pvt. Ltd. upheld for the normal period, if any.
• Demand relating to Sahitya Sadawat Samiti/Suresh Gyan Vihar University educational services set aside.
• Extended-period demand set aside.
• Appeal allowed to the extent indicated above.

Key Takeaway: Exemption under Section 66D(l)(ii) depends on the nature of the educational service and whether it forms part of a curriculum leading to a legally recognised qualification; the provision does not stipulate that the service provider must itself be a university. At the same time, specific exemption conditions applicable to NSDC skill-development programmes must be strictly satisfied.