Service Tax - Commercial Coaching Or Training - Supreme Court Remands Cases to Tribunal
IN Great Lakes Institute of Management Ltd vs CST, Chennai – 2008-TIOL-134-CESTAT-MAD, the CESTAT held, “we find that education in the instant case is not a business. The primary object of GLIM is to impart education. Profit making is not its main motive. The refrain of the several judicial authorities cited is that profit motive characterizes a commercial concern as against general public utility in the case of a charitable organization. Therefore GLIM is not a commercial concern and the training or coaching provided by GLIM is not a commercial activity”.
And the demand for Service Tax was set aside.
The Finance Act 2010 had inserted an explanation in Section 65(105)(zzc) retrospectively with effect from 1st July, 2003, which reads as under:
“Explanation. - For the removal of doubts, it is hereby declared that the expression “commercial training or coaching centre” occurring in this sub-clause and in clauses (26), (27) and (90a) shall include any centre or institute, by whatever name called, where training or coaching is imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organisation under any law for the time being in force and carrying on its activity with or without profit motive and the expression “commercial training or coaching” shall be construed accordingly.”
So predictably, the Revenue took the Great Lakes Institute to the Supreme Court and the Apex Court in had remanded the case to the Tribunal to examine the case in the light of the Explanation inserted in the Act.
The Great Lakes Institute of Management Ltd vs CST, Chennai – was followed in Institute of Insurance & Risk Management - and in this case also the Revenue appealed to the Supreme Court and the Supreme Court has remanded this case also to the Tribunal. -
Apparently the Government is serious about taxing education!