NCS Pearson Inc. Vs Union of India (Karnataka High Court)
Karnataka High Court held that impugned show cause notice u/s. 74 of the CGST Act deserves to be quashed and set aside in as much as issue of classification and taxability against order of the AAAR is pending for adjudication before Division Bench of this Court.
Facts- The petitioner has a division “Pearson Vue” which is engaged in providing computer based test administration solutions and pursuant to its contract with GMAC, USA, the petitioner conduct GMAT on behalf of GMAC for candidates in India.
Subsequent to the GST regime coming into force in India on 01.07.2017, the petitioner filed an application dated 07.01.2020 before the Authority in Advance Rulings (AAR) seeking a Ruling on whether the services engaged by it would come under the ambit of online Information Data Base Access and Retrieval Services (OIDAR services) under GST Laws. By original order dated 22.05.2020, the AAR held in favour of the petitioner that while Type – II tests of the petitioner would come within the ambit of OIDAR services, but Type – III tests are outside the purview of OIDAR services, since it involved more than minimum human intervention.
Being aggrieved, the respondents filed an appeal on 27.08.2020 before the Karnataka Appellate Authority for Advance Ruling (AAAR) on the limited question of classification of Type – III tests conducted by the petitioner. The petitioner having contested the said appeal, the AAAR proceeded to pass an order dated 13.11.2020 allowing the appeal filed by the respondents.
