GST Update No 152 on leviability of GST on Guest Lectures by professor

The concept of Advance Ruling plays a vital role, particularly when there is confusion as regards the applicability of exemption notification to the assessee. At times, there is situation wherein goods/services appear to be covered under more than one exemption entry and there is confusion as regards the taxability of the said goods/services. Recently, the issue regarding leviability of GST on the guest lectures rendered by professor was raised before Karnataka AAR in the case of SRI SAIRAM GOPALKRISHNA BHAT. The analysis of this decision is subject matter of our present update. The applicant is a Professor of Law at National Law School of India University, Bengaluru and is engaged in classroom teaching of students. The applicant sought advance ruling as to whether the income earned for conducting Guest Lectures amounts to taxable supply of service. Further, whether income earned from research and training projects sponsored by the Ministry of Government is a taxable supply, taxed at NIL rate as per Heading 9992 or at 18% under Heading 9983. The applicant contended that the services provided by way of training is recreational activities related to art and culture and hence, exempt under Entry No. 80 of the notification no. 12/2017. The applicant further submitted that teaching and training under research program granted by Government of India is nature of pure services under Article 243G or 243W of the Constitution of India. Further, the said activities are covered under serial no. 72 of Notification No. 12/2017 since the entire expenditure is borne by Government and it stands exempted from tax bracket. The applicant also submitted MOU between Ministry of Environment and Centre of Environment Law Education in support of the contentions placed by them. Reliance was placed on the decision of Apex Court in the case of LOKA SHIKSHANA TRUST wherein it was held that ‘education’ was defined as a process of training and developing knowledge, skill and character of students by normal schooling. The AAR held that the services provided by the applicant as a guest lecturer is not covered under the list of exemption of educational activity since it is not known that the guest lecture is part of the curriculum designed by the educational institution. Further, the applicant is providing guest lectures on law and legal awareness and not on art and culture. Therefore, it shall not be covered under Entry No. 80 pertaining to recreational services. It was held that the services provided by the applicant in the capacity of guest lecturer shall be taxable at 18% GST as the same is covered under “other professional, technical and business services”. Moreover, it was stated that in order to claim exemption of Entry No 72, two conditions are required to be fulfilled i.e. training services to be provided only to Government and total expenditure is to borne by Government itself in this regard. Furthermore, it was held that there is no privity of contract between Ministry of Environment, Government of India and the applicant. Therefore, it was concluded that the above service shall stand taxable at the rate of 18%. The above decision is yet another example that reflects that the exemption notifications are to be interpreted in a strict manner as merely providing guest lectures to an educational institute would not entitle the lecturer for exemption unless and until it is established that the said lectures were part of the curriculum offered by the educational institute. However, GST liability may be avoided in this case if the guest lecturer is on the payroll of the educational institute and there exists employer/employee relationship between them but practically the guest lecturers are not employees of the educational institute. The efforts of the applicant to get the transaction covered under either of the exemption entries-3, or 72 or 80 of the notification no. 12/2017-Central Tax were in vain as the AAR concluded that the said services are liable to GST at the rate of 18%.

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GST Update No 152 on leviability of GST on Guest Lectures by professor

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