AAR (Andhra Bench): GST Exemption is not available for Coaching Classes.

According to the ruling given by the Andhra Pradesh bench of the Authority for Advance Rulings (AAR), the Coaching Classes are not eligible for exemption in Goods and Services Tax (GST), and also the Maharashtra Bench of AAR has taken the same stand earlier.

Considering a provision of the related CGST Act, Entry No.66 states that Educational Services given by Educational Institutions are eligible for exemption only after certain conditions are satisfied that includes the services related to education, and the education is to contribute as a part of a curriculum and for obtaining a qualification which is recognized by any law for the time being in force.

Master Minds coaching classes filed a case about this who is offering a variety of coaching courses (regular, crash courses, revision exam courses) with different fee structures and curriculum options to aspirants (students) of chartered accountancy and cost accountancy streams.

The coaching classes for Inter or Final Certificate examination of Institute of Chartered Accountants and the Institute of Cost Accountants, are not compulsory says the AAR Bench.

These professional institutions which are statutory bodies were themselves offering coaching and training to the aspirants through their regional councils or branches or certain accredited bodies, following the prescribed curriculum.

It was also said, “Master Minds was not accredited or affiliated to, or recognised, or authorised by these two professional Institutions for imparting coaching or training and also the coaching class was not issuing any coaching completion certificate or any study certificate, in respect of the chartered accountancy and cost accountancy courses.”

Due to these reasons, the AAR Bench has given the judgement that the coaching class was not eligible for the exemption provided by the GST notification. The coaching class will have to levy and collect GST at 18%. Likewise, charges collected for providing accommodation and catering services to its students would not get the benefit of any GST exemption.

With Warm Regards,

CL Bureau.