Transportation of School Students
Query (Issue) Started By: – Rushab Jain Dated:- 18-6-2018 Last Reply Date:- 15-8-2018 Goods and Services Tax – GST
Got 25 Replies
GST
We are running a business of transportation of school students. We had an formal agreement with the school that we will provided services of transportation of school students. However we do not receive any consideration from school nor we raise any invoice on school. Entire consideration is received from school students directly. Now my question is whether these services is taxable or exempt?
If it is taxable or exempt please specify under which head i.e service to educational institution or transport of passenger
Reply By YAGAY and SUN:
The Reply:
NIL Rate of GST is applicable on followings.
Education (pre-school to high secondary) including-
(i) transportation of students, teachers and staff;
(ii) mid-day meals and other catering
(iii) security and house-keeping services performed in schools
(iv) a
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al institution.
Thanks
Reply By Rajagopalan Ranganathan:
The Reply:
Sir,
Since you are receiving consideration from the students directly, alternatively you can charge gst @ 2.5% vide Sl. No. 8 (vi) of Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 as amended subject to the condition that " credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle), has not been taken."
Reply By Alkesh Jani:
The Reply:
Sir, Please confirm you turnover. is it above threshold limit?
Thanks
Reply By KASTURI SETHI:
The Reply:
With due regard, I express my opinion as under :- Ultimat goal is exemption to education that is not to tax student. If Notification 11/17 – CT Rate comes into play, the very purpose of exemption to education will be defeated.
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le; and
(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,
and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied.
According to the definition, service recipient in my case are school students( means parents) as consideration is received from them, then I think in my case it would be a taxable supply.
Please clarify, I might be wrong in interpretation.
Thanks
Reply By KASTURI SETHI:
The Reply:
No person can pay any tax on one's own volition. In this situation, Service Receiver is student and not parents. Nobody can deny it. You can write name of student, class, school and parents'name on the invoice. This supply of service is fully exempted. You require to prepare invoice as documentary evidence of service provided to education
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have found one case law of Service Tax which is similar to this business model, the citation of Case Law
"Sangam Travels vs. CCEX, Kanpur" dated 10-1-2017 where in CESTAT Allahabad held in favour of the assessee."
However this is Service Tax Case law , can we apply it in GST for our reference in Maharashtra though it is of Allahabad?
Thanks Once Again
Reply By KASTURI SETHI:
The Reply:
Dear Queries, Let me examine this case law in detail.Thereafter I would be able to express my opinion.
Reply By Alkesh Jani:
The Reply:
Sir,
My intention to ask the turnover, was that, if the transporter's aggregate turnover, is below threshold limit, GST Act is not applicable and if the turnover is above threshold limit, applicability of Act and Notification can be discussed.
Assuming the turnover of transporter is above the threshold limit, than my view is that, the services are provided to the passengers (here student) and not to educational Institute. Even in case of educati
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eply By Rushab Jain:
The Reply:
Dear Sir,
If the same is transportation of passenger ,it will be exempt because it is through non-ac contract carriage.
Please justify / clarify.
Thanks
Reply By KASTURI SETHI:
The Reply:
Issue is being deviated. I still stick to my views. However, if you want to be tension-free, opt for advance ruling. Without advance ruling, no officer will give clear cut reply. Only last resort is AAR.
Reply By YAGAY and SUN:
The Reply:
Yes, Advance Ruling will sort out your issue definitely.
Reply By Rushab Jain:
The Reply:
Dear Sir,
I had gone through your post and noted that it will be better to have advance ruling from the Department. However will request you to give your final comments considering the case law " Sangam Travels vs. CCEx, Kanpur decided by CESTAT allahabad".
Thanks
Reply By Alkesh Jani:
The Reply:
Sir,
The clarification as requested by you is that, a contract may be written or verbal, if executed. In your case, you agreed t
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o is insisting on issuing the Receipt in his name though Bank account belongs to us?
My opinion is that if this is the case then we are indirectly receiving money from school. Hence this is exempt.
PLease clarify if I am wrong.
Reply By KASTURI SETHI:
The Reply:
I understand well that this is a hypothetical question. Anyhow it is to be replied. There is no dispute or doubt about exemption, if you receive your transportation charges from school via bank account.
Reply By Shameem Ahmed:
The Reply:
There are two views expressed above. One is based on purposive interpretation and the other one is based on literal interpretation. In this case, a literal interpretation will defeat the very purpose of exemption. In my view, exemption call be very much availed. In order to avoid any litigation, the transporter can enter into a service agreement with the school for transport of its students and fixing the rate, but in the consideration clause, it can be mentioned that fee as per the agree
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