Section 11C notification saves the day for schools & children
THE Entry no. 9 of the Mega Exemption Notification read -
9. Services provided to or by an educational institution in respect of education exempted from service tax, by way of,-
(a) auxiliary educational services; or
(b) renting of immovable property;
The words "or by" went for a toss by the amending notification dated 01 March 2013 w.e.f 01.04.2013.
The JS TRU letter dated 28/02/2013 explained -
B. Exemptions
4. The following changes are being made w.e.f April 1, 2013 in the exemption notification number 25/2012-ST dated June 20, 2012:
(i) Exemption by way of auxiliary educational services and renting of immovable property by (and not to) specified educational institutes under S. No 9 will not be available;
In the context of the Notification 25/2012-ST, the Board had come out with a Circular No., Dated: September 19, 2013 to assuage the apprehensions expressed by certain educational institutions and organisations in the matter of imposition of service tax on services provided to schools.
DDT had vividly covered this issue in its edition 2194 dated 20 September 2013 and also remarked -
Services provided to the schools are exempted, but the moot question is are the services provided by the schools exempted? If the school provides bus transport or canteen or hostel, are they liable to pay? Does this mean that if a school hires a bus, there is no tax, but if the school owns the bus, there is tax liability?
This is exactly the point on which the Schools wanted clarification from the Board and the Board has conveniently ignored that question.
And then came the notification dated 11 July 2014 which substituted Entry no. 9 to read -
9. Services provided,-
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Government;
(iii) security or cleaning or house-keeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution;"
So, in a way the position prevailing prior to 01.04.2013 was restored.
However, the interregnum period lay unattended and resulted in SCNs and recoveries by the dozen.
We had covered this issue exhaustively in and awaited the section 11C notification which was in the pipeline.
The Board has now issued the notification exempting the services of transportation, by educational institutions to students, faculty and staff of such institutions from the leviablity of Service Tax for the period commencing on and from the first day of April, 2013 and ending with the tenth day of July, 2014.
Was all this not avoidable?
Notification dated September 30, 2016