Service Tax – No exemption to free computer training provided by Bharatiya Vidya Bhavan to economically weaker sections - FM
Mr. Murli Deora had written a letter to the Hon'ble FM forwarding a representation from Bhartiya Vidya Bhavan regarding exemption from the levy of service tax on the free computer training provided to the economically weaker section of the society.
Bharatiya Vidya Bhavan has hired the services of M/s ESSGEE Educational Services, Chennai for providing computer training. For providing this service, M/s ESSGEE Educational Services receives payments from Bhartiya Vidya Bhavan .
The Hon'ble FM has informed Mr. Deora that:-
1. The service provided by M/s ESSGEE Educational Services falls under the category of "commercial training or coaching service" and service tax would be applicable on the considerations received by it from Bharatiya Vidya Bhavan .
2. As regards applicability of Notification No. 10/2003-ST, this notification exempts any service provided by a commercial training or coaching centre, which forms essential part of the course or curriculum of any other Institute or establishment, leading to the issuance of certificate, diploma, degree or educational qualification recognised by law. As the service provided by M/s ESSGEE Educational Services, Chennai does not form part of the course or curriculum which leads to issuance of any educational qualification recognised by law, benefit of the said notification would not be available to them.
3. As regards the request for exemption from service tax, it is the conscious policy of the Government to keep exemptions to the minimum, particularly, end use based exemptions, as these are difficult to administer. Further, ad-hoc exemption is considered only in circumstances of exceptional nature.
4. As no such circumstances of exceptional nature exist in this case, it would not be feasible to accede to the request made by Bharatiya Vidya Bhavan .
Now the field can attack Bharatiya Vidya Bhavan and allege suppression, evasion, collusion and can demand penalty and interest.
Remember the clarification given by the FM to the Madhya Pradesh CM regarding Service Tax on road repair?
Moral of the story : Don't ask the FM for any clarification or exemption – you will end up losing!