In re Batcha Noorjahan (GST AAAR Tamilnadu)
Goods and Services Tax Appellate Authority for Advance Ruling (AAAR), Tamil Nadu, has upheld a ruling denying GST exemption to Tvl. Batcha Noorjahan, proprietress of M/s. School Transport, for services involving the transportation of school students and staff. The AAAR concurred with the initial Authority for Advance Ruling (AAR), determining that the services were provided to the students’ parents, who paid the consideration, rather than directly to the educational institutions. This decision clarifies the interpretation of GST exemption Notification No. 12/2017 – Central Tax (Rate) dated June 28, 2017, specifically Serial No. 66.
Batcha Noorjahan, engaged in providing school bus services, had initially sought an advance ruling on whether her services to students and staff qualified as services to an educational institution and were thus exempt from GST under the aforementioned notification. The AAR ruled against her, concluding that the service recipient was the student/parent, not the school, and therefore the service was not exempt. Aggrieved by this, the appellant filed an appeal, arguing that her services were exclusively provided to schools under long-term agreements, with schools regulating and supervising operations, thereby making the school the de facto service recipient. She contended that the method of fee collection (direct payment from parents) should not alter the nature of the service, and denying the exemption contradicted the legislative intent of reducing financial burdens on students. The appellant also cited a favorable Advance Ruling in the case of M/s. Muniyasamy Abinaya, where similar transport services were granted GST exemption.
