• Whether the long duration post graduate diploma/ degree granting programmes offered by the Indian Institute of Management are exempted from the GST output liability on education as a part of a curriculum for obtaining a qualification recognized by any l

Case: M/s Indian Institute of Management, Bengaluru
Citation: KAR ADRG 25/2018 dated 25^th October 2018
Issue:Whether IIM to be treated as educational institution for availing benefit of exemption?
Brief facts: The applicant states that they are an educational institution of excellence established in the year 1973 with the objectives of imparting high-quality management education and training, conducting industrial and management research, etc. The applicant was established under the auspices of the Ministry of Human Resources Development (MHRD) Government of India as a premier educational institution and is renowned in India for its management education programs. That the applicant was registered as a society with the Registrar of Societies, Mysore State (now Karnataka) vide No. 403/71-72 dated 27-03-1972 and is recognized world over as an institution of higher learning and seat of academic excellence in the field of management. The Indian Institute of Management Act, 2017 was passed and it received the assent of the President on 31st December, 2017 with an object to declare certain Institutes of Management (IIMB is one among the schedule annexed to the Act) to be institutions of national importance with a view to empower these institutions to attain global excellence in management, management research and allied areas of knowledge and to provide for certain other matters connected therewith or incidental thereto. The Government of India notified the Act in the Gazette of India on 31st January 2018. Now by the enactment of The Indian Institute of Management Act, 2017, IIMB is a body corporate as per Section 4 of the said Act. IIMB‟s vision is to develop leaders and entrepreneurs through holistic, transformative and innovative education. Since the years of its existence, IIMB has developed a portfolio of programmes which cater to multiple sectors of society. The IIMB nurtures a teaching philosophy which encourages students to apply their learning in solving the real-life challenges around the world. IIMB currently offers 5 long duration programmes which collectively develop entry and middle level management professionals for companies, government and non-governmental organisations. IIMB also offers certificate programmes of short and long durations under Executive Education Programmes for mid and senior level Executives.
Appellant’s contention: .
The following tables show the various programmes provided by the appellant and their taxability:-

Sl. No.	Programmes Offered	Period	Taxability under GST as per Notification No. 12/2017 –Central Tax (Rate) dtd 28- 06-2017
1.	Fellow Programme in Management (FPM) is a full time doctoral programme and is committed to train individual who will excel in their area of research through publication of high quality work of international standard	5 years	Exempted
2.	Post Graduate Programme in Management (PGP) is designed to equip student with skill and capabilities that will enable them to reach responsible global position in management. The PGP revolves around the principle that world-class business leaders are not mass produced; they are nurtured and developed in a practical application-oriented, user friendly environment. This is a flagship MBA degree equivalent programme where students are admitted through CAT	2 years	Exempted

The applicant has also provided a table containing the programmes which they feel is exempted post enactment of IIM Act 2017-

Sl. No	Programmes Offered	Period	Taxability under GST post enactment of IIM Act 2017
1.	Post Graduate Programme in Public Policy and Management (PGPPM) catalyzed by the Government of India and United Nations Development Program, the PGPPM is packed with path breaking inside about winning policy and making management strategies	1 Year	Exempted
2.	Post Graduate Programme in Enterprise Management (PGPEM) is a weekend management program, designed for middle and senior level working professionals. Participants learn from World Class faculty, while strengthening their network through collaboration with peers during their on-campus long week-end session	2 Years	Exempted
3.	Post Graduate Programme in Management (EPGP) is an intensive program designed to enhance skills and capabilities essential for responsible position at senior management level. Challenging widespread and globally oriented, the objective of this programme is to produce future leaders who can handle the dynamic corporate environment.	1 Year	Exempted

The applicant states that currently certain programmes offered by IIM are exempted as per the Notification No. 12/ 2017. As per the applicant the relevant Heading 9992 vide Sl. No. 67 under which exemption to programmes offered by IIM. The said entry is reproduced as under:

Sl.No.	Chapter, Section, Heading, Group or Service Code (Tariff	Description of Services	Rate (per cent.)	Condition
67.	Heading 9992	Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme: (a) Two-year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management; (b) Fellow programme in Management; (c) Five-year integrated programme in management	NIL	NIL

In the light of the change in the constitution due to the enactment of the Indian Institute of Management Act, 2017, IIMB is now a body corporate governed by the said Act. Therefore, in the above background, IIMB has preferred this application for Advance Ruling in respect of the questions raised, since the Notification No. Page 5 of 12 12/2017–Central Tax (Rate) dated 28th June 2017 has not addressed the current change in Constitution in respect of IIMB.
The applicant has reproduced the provisions of the Indian Institute of Management Act, 2017 in support of awarding of educational qualification which is recognized by the said Act:
i. Section 2 Declaration of certain institutions as institutions of national importance. “Whereas the objects of the Institutes mentioned in the Schedule are such as to make them institutions of national importance, it is hereby declared that each such institute is an institution of national importance.”
ii. Section 3 (h) – “Institute” means any Institute mentioned in column (5) of the Schedule;
iii. Section 4: Incorporation of Institutes (1) On and from the commencement of this Act. Every existing Institute shall be a body corporate by the same name as mentioned in column (5) of the Schedule.
iv. Section 7 : Powers and functions of Institute Subject to the provisions of this Act, every institute shall exercise the following powers and perform the following functions, namely: (f) to grant degrees, diplomas, and other academic distinctions or titles and to institute and award fellowships, scholarships, prizes and medals, honorary awards and other distinctions;
v. Section 8: Institutes to be open to all irrespective of sex, race, creed, caste or class: Provided further that every such institute shall be a Central Educational Institution for the purposes of the Central Educational Institutions (Reservation in Admission) Act, 2006.
xi. Meaning of the term “any law for the time being in force” Further the expression “any law for the time being in force” is of wide connotation. It is submitted that the word “law” itself is very wide in its scope and would include within its ambit not only statutes (whether taxing statute or otherwise) but an order made by the Government, resolution of Government, Government schemes, notification, rules and regulations, customs, usage, etc., which have the force of law.
xiii. The applicant states that in his case the law means The Indian Institute of Management Act, 2017. Thus, as per the provisions of the Indian Institute of Management Act, 2017 the long duration programmes discussed above are approved curriculum-based programmes offered by IIMB.
xiv. Therefore, in the light of the above, all programmes offered by IIMB including executive programmes are covered under education as a part of a curriculum for obtaining a qualification recognized by the Indian Institute of Management Act, 2017 as reproduced above and thus will be covered under Sl. No. 66 of Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017 instead of Sl. No. 67.
Respondent’s Contention and Judgement:
The contentions of the applicant were verified and found that the applicant offers two types of courses –
1. Those related to long term courses which are covered under entry no. 67 of the Notification No.12 / 2017 – Central Tax (Rate) dated 28.06.2017 and these are provided as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme:
(a) Two-year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management;
(b) Fellow programme in Management;
(c) Five-year integrated programme in management
2 Other courses including Executive Development Programmes
The two competing entries of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 relevant to the issue are Entry no. 66 and 67. Both these entries relate to services falling under the Heading 9992. The Heading 9992 appears at serial number 581 in the Annexure: Scheme of Classification of Services attached to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. There are six Groups of various Education Services under the Heading 9992 covering all services from pre-primary education services to specialized education services. Serial No. 66 of the said Notification No. 12/2017 is a general entry in relation to exemption of services provided by an educational institution and /or to an educational institution. Educational institution means an institution providing services by way of (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course. Therefore all educational services provided by an institute, which leads to a qualification/ degree, recognized by the law, for the time being in force, are exempt from payment of GST. The applicants contention is that since the coming into effect of the Indian Institute of Management Act, 2017 the qualifications/degrees conferred by them are recognized by law, all the educational services provided by them in relation to programmes offered by them other than those specifically mentioned under Serial number 67 are exempt services and are covered under serial number 66.
It was found that Serial no. 66 and 67 are related to all educational services covered under the same Heading 9992. This leads us to the inescapable conclusion that Serial Number 67 has been carved out specifically and only for the educational services provided by the Indian Institutes of Management. In other words the Indian Institutes of Management have been segregated from all other educational institutes and the educational services provided by them are subject to different treatment in terms of exemptions. Therefore in so far as educational services provided by Indian Institutes of Management are concerned, the provisions contained in Serial no. 67 alone shall apply. The constitution of the Notification does not allow selective application of Serial No. 67 in respect of educational programmes like (a) two year full time Post Graduate Programmes in management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management; (b) fellow programme in Management; (c) five year integrated programme in Management and application of Serial number 66 for the rest of the educational programmes. In conclusion we are of the opinion that when Notification number 12/2017 provides for a specific entry for the Indian Institutes of Management at serial no. 67, the provisions of serial number 66 shall not apply to them.
It has been concluded that

Supply of online educational journals or periodicals to the Indian Institute of Management, Bengaluru is NOT exempted from reverse charge liability of GST under Sl. No.66 of Notification No.12 / 2017 – Central Tax (Rate) dated 28th June 2017 as amended by Notification No. 2/2018 dated 25th January 2018 .
The long duration post graduate diploma/ degree granting programmes offered by the Indian Institute of Management, Bengaluru other than specifically mentioned in Sl.No.67 of Notification No.12/ 2017 – Central Tax (Rate) dated 28th June 2017 as amended by Notification No.2 /2018 dated 25th January 2018 are NOT exempted from the GST output liability.

This ruling is valid subject to the provisions under Section 103(2) until and unless declared void under section 104(1) of the GST Acts.
Decision:Application rejected and pronounced against the applicant.
Comment:-The crux of this decision is that when there is specific exemption available to IIM with respect to courses offered by it under serial no. 67 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, then, the benefit of general exemption as contained in serial no. 66(a) of the same exemption notification applicable to educational institutions will not be admissible to IIM. It was held that the change in factual position as regards constitution of IIM Act would not alter the position of exemption under GST Law. It is submitted that while this ruling was pronounced by the authority for Advance Ruling of Bangalore, similar view was taken in the case of Indian Institute of Management Prabandh Shikhar-Indore [2018-TIOL-151-AAR-GST] pronounced by Madhya Pradesh Advance Ruling. However, the decision rendered in case of Indian Institute of Management, Calcutta [2018-TIOL-242-AAR-GST] is entirely different as pronounced by Authority of Advance Ruling Kolkata. The AAR Kolkata has opined that after the enactment of IIM Act, it is very well covered by the definition of educational institution for the purpose of exemption under serial no. 66(a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2018 and is equally entitled for the benefit of both the entries being 66(a) and 67. It was also concluded that Supreme Court has held that if assessee is entitled for two benefits, it is at the option of the assessee to avail any benefit irrespective of the fact that the benefit is claimed under general exemption or specific exemption. It is submitted that contrary decisions on the same issue in case of same Institute in different States is really absurd and government should issue clarification at the earliest possible as uniformity is the essence of Law.

Prepared by: Adit Gupta

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