The executive post-graduate programme conducted by the Indian Institute of Management ( IIM ) is subject to Goods and Services Tax (GST), the Authority for Advance Rulings (AAR), Madhya Pradesh said in a significant ruling. The authority clarified that no exemption is provided to such courses under the present GST laws and such courses would be taxable at 18 per cent.
In the instant case, the Indian Institute of Management-Indore submitted that the services provided by an educational institution which provides education as a part of the curriculum for obtaining a qualification recognised by any law for the time being in force are exempted under notification for exemption. It also urged that degrees and diplomas granted are recognised by law by virtue of being granted under the IIM Act. As EPGP is provided by the applicant as the institute under the IIM Act, it (EPGP) qualifies to be an exempted from GST, it was said.
The Authority said that services provided by an educational institution to its students, faculty and staff and also various services such as catering, security and conducting examination provided to the educational institutions will not attract GST.
The relevant notification also exempted the two-year full-time Post Graduate Programmes in Management (for which the admissions are made on the basis of Common Admission Test -CAT), Fellow Programme in Management and Five-year integrated programme in Management, from GST. The notification by the Madhya Pradesh Government had also listed the same three programmes.
The authority clarified that there is no ambiguity in the notification. The entry in the notification seeks to exempt various education programmes conducted by IIMs, except the Executive Development Programme, from payment of GST. It is, thus, clear that irrespective of enactment of IIM Act 2017, the intention of the legislature was not to tax the flagship education programmes conducted by these institutions.
“However, specific exclusion of Executive Development Programme from exemption has been made loud and clear, leaving no scope for any interpretation or reading between the lines,” it observed. Accordingly, the Authority held that the Executive Post Graduate Programme will not be eligible for exemption from GST. Also, such programme being conducted by the applicant shall be chargeable to GST, irrespective of enactment of IIM Act 2017, it ruled.
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