Commissioner of Service Tax II Vs Indian Institute of Management (Supreme Court of India)
The dispute concerned the taxability of various long-term management programmes conducted by an Indian Institute of Management and the scope of service tax exemptions applicable to such courses. The Supreme Court of India dismissed the Revenue’s civil appeal solely on the ground of delay, finding no sufficient cause to condone the delay in challenging the order of the Tribunal. As a result, the findings of the CESTAT, Bangalore, attained finality.
Read CESTAT Order: Service Tax Payable on PGPPM, PGPEM & EPGP Course Due to Lack of Recognition
Before the Tribunal, the core issue was whether service tax was leviable on fees collected for four long-term programmes—Post Graduate Programme in Management (PGP), Post Graduate Programme in Public Policy and Management (PGPPM), Post Graduate Programme in Enterprise Management (PGPEM), and Executive Post Graduate Programme in Management (EPGP)—for the period from 2010–11 to 2016–17. The department alleged that these programmes constituted taxable “commercial training or coaching services” under the Finance Act, 1994, as they were not covered under the negative list or exemption notifications. Substantial demands, along with interest and penalties, were raised through show cause notices.
The adjudicating authority dropped the demand relating to the two-year full-time PGP, holding it exempt in light of Notification No. 9/2016-ST and CBEC Circular dated 29.02.2016, which clarified that such exemption was retrospective for PGP and certain other specified programmes. However, the demands were confirmed for PGPPM, PGPEM, and EPGP on the ground that no evidence was produced to show that these courses were recognised qualifications under law.
