In re Batcha Noorjahan (GST AAR Tamilnadu)
Tamil Nadu Authority for Advance Rulings (AAR) examined whether the transportation services provided by the applicant, Tvl. Batcha Noorjahan, to school students should be considered as services provided to educational institutions and, consequently, be exempt from GST under Notification No. 12/2017 – Central Tax (Rate). The applicant, engaged in the business of transporting school students, contended that their services should qualify for GST exemption as they were essential to educational institutions. However, since the transport fees were collected directly from students and not from schools, the authority needed to determine if the exemption applied.
Upon review of agreements, financial statements, and receipts, the AAR found that while the applicant had a lease agreement with schools for transportation purposes, no payment was made by the schools for these services. Instead, the applicant collected transport fees directly from students and issued receipts under their trade name, with GST at 5% already applied. The financial records showed no financial transactions between the applicant and the schools, further supporting the argument that the applicant’s services were directly rendered to students and not to educational institutions.
The AAR emphasized that for an exemption under Serial No. 66 of Notification No. 12/2017, services must be provided to an educational institution. Since the applicant received payments from students rather than the school, it concluded that the applicant’s service did not qualify for the exemption. Additionally, the authority ruled that the applicant’s transportation services fell under the category of “transport of passengers by motor vehicle,” attracting a 5% GST rate without input tax credit as per Sl. No. 8(vi) of the same notification.
