Indian Institute of Management Vs Commissioner of Service Tax-II (CESTAT Bangalore)
The dispute before the Customs, Excise and Service Tax Appellate Tribunal, Bangalore concerned the levy of service tax on long-term management programmes conducted by an Indian Institute of Management for the period from 01.05.2011 to 30.06.2017. The department alleged that fees collected for four 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)—were taxable as “commercial training or coaching services” under the Finance Act, 1994, and later as taxable “services” after 01.07.2012. Substantial demands were raised through show-cause notices, partly confirmed by the adjudicating authority.
Read SC Order: Service Tax Exemption Restricted to PGP Only, Revenue Appeal Dismissed by SC
The adjudicating authority dropped the demand relating to the two-year full-time PGP, relying on Notification No. 9/2016-ST dated 01.03.2016 and CBEC Circular dated 29.02.2016, which clarified that exemption for certain IIM programmes was retrospective. However, demands were confirmed for PGPPM, PGPEM, and EPGP on the ground that no evidence was produced to establish that these programmes were qualifications “recognised by law”.
Before the Tribunal, the core issues were whether PGPPM, PGPEM, and EPGP were liable to service tax during the relevant period, and whether the extended period of limitation could be invoked. The appellant contended that all programmes were post-graduate diplomas recognised by governmental authorities and supervisory bodies, relying on office memoranda, communications from the Ministry of Human Resource Development, and earlier judicial precedents. It was also argued that the Indian Institutes of Management Act, 2017, being declaratory, conferred recognition retrospectively on all such programmes.
