In re In re Symmetric Infrastructure Private Limited (GST AAR Rajasthan)
Q.1 Applicant supplies services of coaching to students which also includes along with coaching, supply of goods/printed material/test papers, uniform, bags and other goods to students. Such supplies are not charged separately but a consolidated amount is charged, the major component of which is imparting of coaching. In such circumstances, whether such supply shall be considered, a supply of goods or a supply of services?
Ans:- Supply by the Applicant will be considered ” Supply of Service”.
Q. 2. If the answer to the aforementioned first question is supply of service, whether such supply shall be considered as composite supply If yes. what shall be the principal supply?
Ans:- Yes, such supply shall be considered as Composite supply, and Coaching service shall be principal supply.
Q.3. Applicant provides coaching service under a business model through Network Partners as per sample agreement attached, containing obligations of Applicant and Network partners. Accordingly, the network partner provides the services to the students on behalf of Applicant. In such a case, who shall be considered as supplier of service and recipient of service under the agreement?
Ans:- Applicant will be service provider to the students and Network partner will be service provider to the applicant.
Q.4 Subject to Q. No. 3 above, what shall be the value of service provided by Applicant to students and by network partner to Applicant?
Ans: – Total consolidated amount charged for which Tax invoice generated by the applicant will be the value of service supply by the applicant.
Q5. Whether both, Applicant and network partner can avail eligible ITC for their respective supplies?
Ans:- Applicant can avail eligible ITC as per provisions of GST Act, 2017.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
> At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
> The issue raised by M/s Symmetric Infrastructure Private Limited, 33A, Talwandi, Kota, Rajasthan, 324005 Rajasthan (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a), (c) & (d) given as under: –
(a) Classification of any goods or services or both;
(c) determination of time and value of supply of goods or services or both, and
(d) admissibility of input tax credit of tax paid or deemed to have been paid
Further, the applicant being a registered person (GSTIN is 082100000112ARG) as per the declaration given by him in Form (ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority7. Based on the above observations, the applicant is admitted to pronounce advance ruling.
A. SUBMISSION AND INTERPRETATION OF THE APPLICANT:
Description (in brief)
> The applicant intends to provide coaching services to its enrolled students under its supervision through Network partner.
> The applicant will appoint Network Partner in different cities/towns for rendering and providing, on principal-to-principal basis, training /coaching and other related ancillary functions/services for the courses decided by applicant to its enrolled students.
> The applicant shall provide study material and student kit which will include test paper, printed material, uniform, bags and other goods.
> The applicant will also decide the schedule of course, schedule of method of teaching, training/coaching and education to the students.
> Students enrolled with the applicant will be charged a consolidate amount which will include the supply of goods and / or services, i.e., service of coaching and other supply of related goods like bag, uniform etc.
Flow chart of activities between applicant and students
> Applicant will raise tax invoice to students who wishes to enroll with the applicant.
> Network Partner shall carry out/conduct course classes offered by the applicant at its premises for the students enrolled with the applicant.
> Network Partner shall engage qualified, experienced and competent faculty for teaching the courses offered by the applicant
> Fees collected from the students will be deposited in an Escrow account.
> For such coaching services provided to applicant. Network Partner will raise an invoice of coaching charges to the applicant for the services provided.
Question(s) on which advance ruling is sought
1. Applicant supplies services of coaching to students which also includes along with coaching, supply of goods/printed materia/test papers, uniform, bags and other goods to students. Such supplies are not charged separately but a consolidated amount is charged, the major component of which is imparting of coaching. In such circumstances, whether such supply shall be considered, a supply goods or a supply of services?
2. If the answer to the aforementioned first question is supply of service, whether such supply shall be considered as composite supply? If yes, what shall be the principal supply’
3. Applicant provides coaching service under a business model through Network Partners as per sample agreement attached, containing obligations of Applicant and Network partners. Accordingly, the network partner provides the services to the students on behalf of Applicant In such a case, who shall be considered as supplier of service and recipient of service under tire agreement?
4. Subject to Q. No. 3 above, what shall be the value of service provided by Applicant to students and by network partner to Applicant?
5. Whether both, Applicant and network partner can avail eligible ITC for their respective supplies?
Statement of relevant facts having a bearing on the questions raised:
> Symmetric Infrastructure Private Limited (hereinafter referred as “applicant”) (CIN: U45201RJ2007PTC025506), a private limited company, duly registered under the companies act, 2016 and having its registered office at Office No. 106. Ground Floor, Plot No. C, C-150(A) Road No. 5. IPIA Kota. Rajasthan-324005.
> The applicant was incorporated on 14/12/2007 to carry out the objective of business to provide coaching / training Courses and programs for competitive exams including but not limited to entrance examinations for engineering, medical. Law and commerce colleges, as also various qualifying examinations and which may also include products (goods) and services at its various places of operation to the general public, schools etc through class room contact training ‘coaching . Live Learning Program and Distance Learning program.
> The applicant has two directors, namely:-
A. Kamla Shanker
B. Satish Kumar Shanna
> The applicant for operational efficiency, effective coaching and other commercial reasons desirous to provide such core coaching /training activity (as also various other ancillary functions / activities) in respect of its enrolled students to under its supervision through Network Partner.
> The applicant will appoint its ‘Network Partner7 for rendering and providing, on principal-to-principal basis, training / coaching and other related ancillary functions services for the Courses to the students enrolled with applicant.
> The salient features of the proposed agreement be;
A. Obligations of Network Partner:-
(i) Conducting Courses offered by applicant at its Premises for registered students of applicant as per guidelines of applicant.
(ii) At its own cost and expense, maintaining adequate number of qualified, experienced and competent faculties for teaching Physics. Chemistry. Biology. Mental ability. Mathematics and other subjects as per requirements of the Courses.
(iii) Conducting periodical tests in respect of the Courses and check answer books for performance evaluation of the students.
(iv) Selling registration / admission forms, getting the admission forms filled, collecting the courses fees and maintaining records of enquiries, admission packets sale, students enrolled with applicant without any delay. Deposit of collection towards registration / admission and course fee from enrolled students in the designated Bank Account.
B. Obligations of Applicant:-
(i) Facilitate / assist in Appointing/ the faculty in consultation and approval of the network partner.
(ii) Preparing and providing-
(a) high quality printed study materials,
(b) soft copy of examination papers,
(c) soft copy of course planners, and
(d) soft copy of annual schedule or any changes in any of the above papers.
(iii) To provide Student Kit’s to all registered students
(iv) communicating in time any changes in any of study material, student kits, examination papers, course planners, and annual schedule or any changes in any of the above
(v) Deciding schedule of courses, schedule of methods of teaching, training / coaching and education to the students undergoing training / coaching with the object of not only facilitating success in targeted competitive examination but also build self-confidence to face stiff standards set for competitive examinations;
(vi) Conducting motivational, counselling and conducting an ‘Inhouse Career Orientation Session(s) or Seminar(s)’ at the said Premises during the course.
C. The Network Partner will collect all fees from the registered students in timely manner and shall deposit in designated Escrow bank account.
D. Applicant shall issue tax invoice to the students who wishes to enrol with it. of a consolidate amount (which includes coaching service and other related goods) which may be collected by the network partner and deposit the same in the said escrow account.
E. Network Partner shall issue tax invoice for Service charge to the applicant for its coaching services (and other related managerial/ancillary services) in respect of various offline/Online Courses of the applicant.
B. COMMENTS OF THE JURISDICTIONAL OFFICER
The jurisdictional officer has submitted his comments vide their letter which can be summarized as under:
The detailed comments sought on the questions mentioned in Annexure-ii of the letter are as following:
Comments on the Advance Ruling application filed by M/s SYMMETRIC INFRASTRUCTURE PVT. LTD. (URD).
Ans-1) As the applicant supplies services of coaching to the students which also includes along with coaching supply of goods/printed material/text papers’ uniform, bags and other goods to students. As such supplies are not charged separately but a consolidated amount is charged, the major component of which is imparting of coaching. In such circumstances such supply shall be considered supply of services.
Ans-2) As per Section 2 (74) such supply shall be considered as mixed supply. As per definition, here two or more individual supplies of goods or services or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
Ans-3) Here in this case, there are 2 cases:
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