In SYMMETRIC INFRASTRUCTURE PVT.LTD. [Advance Ruling No. RAJ/AAR/2021-22/09 dated September 02, 2021], Symmetric Infrastructure Pvt. Ltd (“the Applicant’’) has sought an advance ruling on certain issues in relation to coaching services and its taxability.

In this case, the Applicant intended to provide coaching services to its enrolled students under its supervision through Network partner. The Applicant shall 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 offered 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. 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.

The Network Partner will collect all fees from the registered students in timely manner and shall deposit in designated Escrow bank account. The 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. 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.

The Hon’ble Rajasthan Authority for Advance Ruling (“RAAR”) clarified certain questions on which Advance ruling is sought. These questions and ruling given by AAR are as follows.


Q.1 Where the coaching services provider 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.  According to Section 7(1) of the CGST Act, 2017 (“CGST Act”) Supply by the Applicant will be considered “Supply of Service”.

Q.2 If it is held to be a supply of service, whether such supply shall be considered as composite supply? If yes. what shall be the principal supply?

Ans.  According to Section 2(30) (“CGST Act”) and Section 2(90) (“CGST Act”) Yes, such supply shall be considered as Composite supply, and Coaching service shall be principal supply.

Q.3 Where coaching services are provided under a business model through Network Partners as per sample agreement attached, containing obligations of the Applicant and Network Partners. Accordingly, the Network Partners provides the services to the students on behalf of the Applicant. In such a case, who shall be considered as supplier of service and recipient of service under the agreement?

 Ans. According the agreement, the Applicant will be service provider to the students and Network partner will be service provider to the Applicant.

Q.4 What shall be the value of service provided by the Applicant to students and by Network Partner to the Applicant?

 Ans. According to Section 15 of the CGST Act, Total consolidated amount charged for which Tax invoice generated by the Applicant will be the value of service supply by the Applicant.

Q.5 Whether both, Applicant and Network Partner can avail eligible Input Tax Credit (“ITC”) for their respective supplies?

Ans. According to Section 16(1) and in manner specified in section 49 of the, the Applicant can avail eligible (“ITC”). The AAR did not answered on the issue of eligibility of ITC to the channel partner but restricted the answers to the Applicant coaching services provider only.


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One Comment

  1. Om Prakash Jain says:

    Kindly elaborate as to how it is a “Composite Supply” u/s 2(30) GST Act?
    In my view it is a Mixed Supply.
    CA Om Prakash Jain s/o J.K.Jain, Jaipur
    Tel: 9414300730

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