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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST Update No 265 on taxability of educational board conducting examination

GST Update No 265 on taxability of educational board conducting examination
With the advent of paradigm shift in indirect taxation sector, the question as regards to applicability of GST on education sector is a matter of grave concern. Following the passage of time, commercialisation in educational sector has increased tremendously. The Government has exempted the services provided to and by educational institutions vide Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. On similar lines, one case was reported before Karnataka AAR in the case of M/S KARNATAKA SECONDARY EDUCATION EXAMINATION BOARD. The decision imparted is subject matter of our present update.
 
The applicant is an independent board engaged in holding and conducting examinations. The advance ruling was sought in respect of following questions:
1.   Whether the applicant is an “educational institution” and ought to be treated as such for the purpose of GST applicability?
2.   Whether the activity of printing question papers, admit cards, answer sheets, fail marks cards etc. be treated as supply of service. If so, whether it is ancillary service be covered under Exemption Notification and thereby attract NIL rate of tax?
3.   Whether the services of scanning of notebooks, hiring of light vehicles and heavy vehicles for transportation of educational material, obtaining security guards and house keeping services etc. is exempted from GST being covered by Notification No. 12/2017 dated 28.06.2017.
 
The applicant analysed and submitted definition of “educational institution” as given in the Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 wherein it was concluded that the legislative intent clearly specifies that educational institution is one which provides services facilitating in obtaining qualification recognised under any law for the time being in force. Therefore, they are educational institution. Reliance in this respect was placed on various decisions of High Courts and Supreme Court such as Gujarat High Court in the case of M/S SAHITYA MUDRANALAYA PRIVATE LIMITED V/S ADDITIONAL DIRECTOR, GENERAL. It was further argued that the Legislature meant the entire process of preparation of curriculum to holding of examination leading to obtaining qualification in recognised law is covered.  Therefore, the school board would clearly fall under the definition of “educational institution”. Furthermore, it was submitted that incidental services provided to Board or on behalf of Board can be indisputably classified under services and not goods. Therefore, they are exempted vide S. No. 66 of the Exemption notification.
 
The AAR analysed and held that the Karnataka Board is an educational institution for the purpose of providing service by way of conduct of examination to the students. Further, as far as printing activity is concerned, the applicant is recipient of service and the printing activities are carried on by third party. However, it was concluded that as per Section 95 of CGST Act, 2017, advance ruling can be sought by the applicant who proposes or undertakes the activity and not by recipient of supply. Therefore, the Authority for Advance Ruling refrained itself from imparting any judgement on the said point.
 
There have been various advance rulings wherein the advance ruling has refrained from commenting on the issue as the application for advance ruling was filed by the recipient of service rather than the supplier of service. As regards considering education board as “educational institution”, it is pertinent to mention here that CBIC addressed the difficulties faced by industry in this respect and thereby issued a Circular No. 151/07/2021-GST dated 17.06.2021 clarifying that Central and State Education Boards shall be treated as Educational Institution for the limited purpose of providing services by way of conduct of examination to the students. It is high time that the circulars should be  followed by departmental authorities so that unwarranted litigation may be avoided.

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