Private coaching for CA, CS, CMA not an “educational institution”, liable to pay GST, says AAAR

The Kerala Advance Rulings Appeal Authority (AAAR) has ruled that private coaching for Chartered Accountants (CA), Company Secretaries (CS), Cost Accountants (CMA) etc. were not an “educational institution”, subject to GST.

The appellant, Logic Management Training Institute, is an institute providing coaching to students to help them achieve a qualification such as a chartered accountant. Cost accountant. Company secretary, certified accountant, certified accountant. Association of Chartered Accountants etc.

The appellant appealed against the decision of AAR, Kerala, in which it was held that institutes providing training for students to become Chartered Accountants (CA), Cost Accounting, Corporate Secretary (CS), certified management accountant (CMA), etc. are not covered by the definition of “educational institution” in paragraph 2 (y) of the central tax (rate) notification No. 12/2017 dated June 28, 2017, which concerns the exemption notification Services.

The coram of Shyam Raj Prasad and Anand Prasad ruled that the appellant did not provide any primary or pre-school education or up to upper secondary or equivalent level, and that he did not undertake to provide education within the framework of an approved vocational education course. In addition, the appellant does not issue any certificate or diploma and it is not compulsory for the student to follow a supervision in institutions like that of the appellant to become a CA, CS, CMA, etc.

AAAR ruled that the appellant could not be categorized as “educational institution” and upheld the decision of AAR, Kerala.

The appeals authority clarified that the conduct of degree courses by colleges, universities or institutions which lead to the granting of qualifications would be covered by the definition of “educational institution” and that the training provided by private coaching institutes would not be covered, as such training would only lead to the granting of a recognized diploma.

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Janice G. Ball