In Re: M/s. BC Examinations and English Services India Pvt. Ltd.
GST
2018 (7) TMI 1495 – AUTHORITY FOR ADVANCE RULINGS HARYANA – 2018 (15) G. S. T. L. 107 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS HARYANA – AAR
Dated:- 1-6-2018
AAR No. HAR/HAAR/R/2017-18/11
GST
SANGEETA KARMAKAR AND VIJAY KUMAR SINGH, MEMBER
Present for the Applicant: Sh. Amar Pratap Singh, Advocate and Sh. Ankit Awal, C.A.
Present for the department: –
Factual Background
1. As per the statement of facts submitted by the Applicant, it is a subsidiary of the British Council which is the U.K.'s International Organisation for cultural relations and educational opportunities. International English Language Testing System (hereinafter referred as 'IELTS') is a highly regarded English Language proficiency test developed, managed and owned by the British Council, U.K. (hereinafter referred to as 'BCUK').
2. BCUK furthers its charitable, educational and cultural relations by offering
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ervices would cover the following:
(i) To source and manage the running of suitable test centre venues in India for the examination:
(ii) To receive registration information from BCUK and its registration agents for IELTS;
(iii) To maintain supplies of Test Materials for administration and comply with security requirement set by BCUK and relevant external exam boards in relation to logging in and out. To distribute test materials to candidates on the test day and collect them after test administration for processing;
(iv) To manage test administration and logistics for test days, including scheduling of the Applicant's staff and liaison with the test centres;
(v) To provide back office support in relation to financial controls and accounting processes in respect of examinations held at test centres managed by the Applicant;
(vi) To print IELTS result in paper form from BCUK's global system and distribute certificates on BCUK's behalf to successful candidates i
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r alt the activities involved in the exam support services constitute a mixed supply or a composite supply?
2. What will be rate of GST applicable on these exam support services?
3. What is the place of supply of these exam support services rendered by the Applicant BCKU?
Comment of the Officer under section 98 (1) of the CGST, HGST Act 2017
The Assistant Commissioner, Division East-II, Central GST, Gurugrum vide his comments dated 17.05.2018 has stated as follows:
1. Regarding question no. 1
“The impugned services proposed to be provided by the Applicant constitute a composite supply of conduction of examination and other back end support Services.”
2. Regarding question no. 2
“The principal supply is of the conducting exams which is taxable @ 18%.”
3. Regarding question no. 3
“The place of supply the impugned service shall be the location of the recipient of the service.”
Record of Personal Hearing
The applicant was afforded a personal bearing for 24.05.2018 and on 31.05.
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rts. As per schedule-I appended to the copy of agreement submitted on record part-A is for responsibilities of service recipient, part-B specifies 8 types of exam support services and pan-C specifies to services pertaining to student facilitation services.
The Ld. Counsel for the applicant had argued that the proposed services as per part-B in schedule -I appended to the copy of agreement are exam support services and constitute a composite supply of conduction of examination and the services mentioned in part-C of said agreement are other back end support services which are so bundled together that such back end support services cannot be said to have an independent existence. These are only ancillary to conduction of examination. The bundle of these services is classifiable as other educational support services under service code 999299 group code 99929 and beading 9992 as per scheme of classification of services appended to notification no. 11/2017 Central Tax (Rate) dated 28
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to several case laws and particularly to section 2 (6) of the IGST Act.
After hearing these present in detail the decision on admissibility of the application was pronounced and as regard decision on question 1 & 2, on which the application was admitted, was reserved which is being released today.
Discussion and finding of authority
Since the ruling is restricted only to the question of nature of supply and rate of tax applicable, it is relevant to understand the provisions of law on these issues.
1. Section 2(30) of the CGST/HGST Act 2017 defines a “composite supply” to mean a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the course of business, one of which is a principal supply.
2. Further Section 2(90) Of CGST/HGST Act 2017 defines a “principal supply” to mean the supply of goods or services which const
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nistration and comply with security requirement set by BCUK and relevant external exam boards in relation to logging in and out. To distribute test materials to candidates on the test day and collect them after test administration for processing;
(iv) To manage test administration and logistics for test days, including scheduling of the Applicant's staff and liaison with the test centres;
(v) To provide back office support in relation to financial controls and accounting processes in respect of examinations held at test centre; managed by the Applicant;
(vi) To print IELTS result in paper from from the BCUK's global system and distribute certificates on BCUK' s behalf to successful candidates in India;
(vii) To recruit, train and monitor invigilators, examiners and test paper markers for the IELTS tests, in accordance with the standards set by BCUK and their own administrative and management staff;
(viii) To periodically inspect the quality of test centres and pr
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