In re Educational Initiative Pvt. Ltd. (GST AAAR Gujarat)
In view of the foregoing discussion, we allow the appeal filed by the department, modify the Advance Ruling No. GUJ/GAAR/R/27/2020 dated 02.07.2020 of the Gujarat Authority for Advance Ruling and hold that ASSET (Assessment of Scholastic Skills through Educational Testing – with its variants) conducted by M/s. Educational Initiative Private Limited is not covered within Entry at Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended and corresponding Entry of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended and hence not exempted from payment of Goods and Services Tax.
FULL TEXT OF THE ORDER OF AUTHORITY OF APPELLATE ADVANCE RULING, GUJARAT
At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (herein after referred to as the ‘CGST Act, 2017’) and the Gujarat Goods and Services Tax Act, 2017 (herein after referred to as the ‘GGST Act, 2017’) are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean reference to the corresponding similar provisions in the GGST Act, 2017.
2. M/s. Educational Initiative Private Limited (herein after referred to as “the applicant”) raised the following question for advance ruling in the application for Advance Ruling filed by it before the Gujarat Authority for Advance Ruling (herein after referred to as the ‘GAAR’).-
” Whether the educational assessment examination (ASSET) with its variants provided by the applicant to school/educational organization is exempted from payment of GST under Sr. No. 66(b)(iv) of the Not. No. 12/2017-CT (rate) dated 28.06.2017 and entry No. 69(b)(iv) of Not. No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 as well as equivalent SGST Notification “.
2.1 The applicant submitted in the application for Advance Ruling that it deals in the products and solutions mainly intended to be used by primary and secondary schools for the assessment and learning. ASSET is examination tool for educational assessment of student in class 3rd-10th Standards across India and outside India. They provide the question bank of various subjects which are set by them based on the class level, board (like state or CBSE or ICSE etc.) and the methodology adopted by the school for teaching, to the Schools and it is called “ASSET” which stands for “Assessment of Scholastic Skills through Educational Testing”. The applicant submitted that it is a scientifically designed, skill-based assessment Exam. Rather than testing rote learning, it uses multiple-choice question to focus on measuring how well SKILLS and CONCEPTS have been understood by the students. The basic nature of ASSET service is an examination to be conducted by Education Institution (School) but outsourced to the Educational Initiatives (EI) i.e. to the applicant. The assessment generates examination reports for students, indicative of their progress and topics that require attention and improvement. ASSET is an educational assessment exam taken at school and it does not envisage any kind of coaching and / or training of teachers or administrators. ASSET exam is conducted without any pre / post teaching business relation with the school. The exam is conducted at school and schools, based on their internal policy, make ASSET a part of their evaluation system. They also give student wise appropriate weightage to ASSET score. ASSET also offers a dynamic online Exam, apart from the pen and paper version. It has all the advantages of ASSET with some additional benefits like – immediate reports, easy online access to report, increased accuracy in reporting, faster remediation, flexible test dates, fewer logistics hassles etc.
2.2 The applicant has submitted that they provide the service of diagnostic assessment examination of students of educational institutions. The educational institutions which avail the said service, conduct tests/ examination on students on a yearly basis. The said technique of examination helps assess the student learning and it also aid teachers in identifying the focus areas to support students. Educational institution gets insights about the students learning levels and accordingly plans the remediation for the identified learning gaps.
2.3 The applicant submitted that services provided by them to the educational institution are services relating to conduct of examination by educational institution and it is exempted under Sr. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and corresponding Entry of Notification No. 12/2017-State Tax (Rate) dated 30.06.2017 (herein after reference to Central Tax (Rate) Notification includes reference to corresponding State Tax (Rate) Notification). As per Entry No. 66 of the said Notification, various specified services provided by/ to an educational institution are exempt. Service specified under Entry No. 66(b)(iv) reads as under, “Service Provided (b) to an educational institution, by way of,–
(iv) services relating to admission to, or conduct of examination by, such institution, up to higher secondary.
As per the above mentioned entry, services are exempt only when the same are provided by/ to an institution which qualifies the definition of an ‘educational institution”. Further, it is submitted that the service provided by the applicant is in relation to conduct of online examination by schools and it does not have any other use than in conducting a specific examination. The applicant is, therefore not liable to pay tax on the service provided to the Educational institution.
2.4 The applicant submitted that every activity of educational institution by which it examines progress or test qualification or knowledge of student would fall under meaning of examination by the educational institution. In the instant case, applicant is providing contents to the school for conducting examinations and after examination, provides reports on performance of students. These reports are used by the schools for evaluation of the students. Thus in view of the above, service provided by the applicant is in relation to conduct of examination.
3. The GAAR, vide Advance Ruling No. GUJ/GAAR/R/27/2020 dated 02.07.2020, inter-alia observed that, the applicant is supplying “ASSET” multiple question to the Schools for the students of 3 rd to 10th Standards and such schools are providing education to the students up to higher secondary standard.Therefore these schools fall under the definition of Educational Institution as defined under sub-clause (i) of clause (y) of Paragraph 2 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Further, it is observed that the applicant is supplying ASSET multiple questions or a set of questions on various subjects which are set by them based on the class level, board (like state or CBSE or ICSE etc.) and the methodology adopted by the school for teaching, to the School for taking the examination on students on yearly basis. ASSET is an educational assessment exam taken at school and it does not envisage any kind of coaching and/ or training of teachers or administrators. The exam is conducted at schools, based on their internal policy, make ASSET a part of their evaluation system. They also give student wise appropriate weightage to ASSET score.
3.1 GAAR has further observed that the term “relating to” has been held to be equivalent to or synonymous with as to “concerning with” and “pertaining to”. Exemption entry uses this term ‘relation to’ and therefore they were of the opinion that any service provided which helps the educational institution in its act of examination will be covered and shall be eligible for exemption from levy of GST. In this regard, GAAR has relied upon the Hon’ble Supreme Court judgement in the case of Doypack Systems (P) Ltd Vs UOI [1988 (36) ELT 201 SC], wherein it was held by the Hon’ble Apex Court that the expressions “in relation to” is a very broad expression and has a very wide meaning, it pre-supposes another subject matter.
3.2 Further, it is observed that in GST flyer 40 dated 01.01.2018 issued for explaining taxability of education sector, it has been clarified that, Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Therefore, GAAR has held that the services have been provided to the schools in relation to conduct of examination of students by such educational Institutes. The GAAR has also placed reliance on the ruling of M/s. Edutest Solutions Private Limited, Gujarat AAR (2018 (10) TMI 201) and M/S. The Bangalore Printing And Publishing Co. Limited, Karnataka AAR (2019 (11) TMI 157), wherein it was held that supply of printing question paper is eligible for exemption under Sr. No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. In the instant case, the applicant has been preparing the questions too apart from printing them, accordingly similar kind of service was provided by the service provider to Educational Institutions. In view of the foregoing, the GAAR has ruled as follows :-
Question : …………………………
Ans: Yes, exemption is available in view of the above discussion in respect of ASSET services provided to educational institution.
4. Aggrieved by the aforesaid ruling, the Assistant Commissioner, Central Goods and Services Tax, Division – VII, Ahmedabad – South Commissionerate (Jurisdictional Officer) (herein after referred to as the “appellant” or the “Department”) has filed the present appeal.
4.1 It has been submitted in the grounds of appeal that the aforesaid Advance Ruling is based on erroneous interpretation that the appellant provides service to an educational institute by way of service related to admission or conduct of examination by, such institute, up to higher secondary. Thus Authority of Advance Ruling has erroneously granted the benefit of Exemption of GST under Sr. No. – 66(b)(iv) of the Notification No. – 12/2017-Central Tax (Rate) dated 28.06.2017 and Entry No. – 69(b)(iv) of Notification No. – 9/2017-Integarted Tax (Rate) dated 28.06.2017 as well as equivalent SGST Notification. In terms of the entry Sr. No. 66(b)(iv) of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended vide clause (o) of Notification No. 2/2018-Central Tax (Rate) dated 25.01.2018, Service provided to an educational institution, by way of,-services relating to admission to, or conduct of examination by, such institution; up to higher secondary will attract NIL rate of GST.
4.2 It has been further submitted that as per applicant company’s profile available on linkedin i.e. in.linkedin.com/company/educational-initiatives, their goal is to reach a multitude of children across different strata of society, irrespective of the kind of education they are receiving today or the curriculum they are following. They achieve this goal by building products that focus on diagnostic assessment and personalized learning. They believe in a scientific approach to conceptualizing, designing and building their products. This stems from a dream to discover SCIENCE OF LEARNING that can systematically be made available to teachers. The appellant in their ASSET Broucher 2018 (available on website) has mentioned that ASSET is “India’s No. 1 Assessment Programme, recognized by the world.” The meaning of term “Examination” “Assessment” and “Programme” has been taken from the Collins dictionary :
Examination: An Examination is a formal test that you take to show your knowledge or ability in a particular subject or to obtain a qualification
Assessment – An assessment is a consideration of someone or something and judgment about them
Programme – A programme of actions or events is a series of actions or events that are planned to be done.
It has been submitted that the combined reading of meaning of Assessment Programme reveals that it means, Based on the consideration of someone or something and judgment about them, a series of actions of event that are planned to be done. ASSET assessment programme fits into the above definition i.e. ASSET evaluate the students’ performance based on the assessment test and accordingly prescribe students, teachers and management, personalized feedback, personalized report, benchmarking, practice question for learning purpose and other number of series of events and actionsas mentioned below,-
(i) It provides insight on the performance of the entire school on all subjects at a national, state and city level.
(ii) It provides in depth of section’s performance, skill analysis highlights areas of improvement for section.
(iii) Assess and inform students understanding of concepts and about critical learning gaps.
(iv) What should teachers do to improve classroom instruction.
(v) Provides insight more inMybooks i.e. StudentMybook, TeacherMybookand Management Mybook.
(vi) Student Mybook consists of following : Response Sheet, Skill Profile and Remediation target, Strength and Weakness with remediation planning, Practice question for learning check.
(vii) Teacher Mybook consist performance table for student responses, Skill summary for remediation target, CWA question with remediation planning, practice question for learning check.
(viii) Management Mybook offers benchmarking of the whole school at city, regional and national level.
(ix) POST ASSET analysis with a focused 1 day workshop is conducted by special trainers.
4.3 It has been submitted that as per the dictionary meaning of Examination, “Examination is a formal test that you take to show your knowledge or ability in a particular subject or to obtain a qualification.” However, the ASSET being an Assessment Programme, has not just the formal test but much beyond that. ASSET is an assessment programme which evaluates the student performance based on the assessment test and accordingly prescribes them personalized feedback and practice question for learning purpose. ASSET provides the number of educational services referred above to the School. ASSET is not limited to above but also further provides the opportunities for gifted students. Students of grades 5 to 8 who perform exceptionally well in the ASSET test are invited to appear for ASSET Talent Search — a two-level above test designed to identify academically gifted students. The top-performing students in ASSET Talent Search then get an opportunity to participate in various gifted programme offered by ASSET & their partner universities & research institutes. Such services by way of ASSET are provided to Schools by the applicant and they are not at all concerned with the core education of Schools. In view of the above discussion, it is clear that the applicant M/s Educational Initiatives Private Limited deals in the business of building products that focus on diagnostic assessment and personalized learning and not in preparation of examination papers and supplying the same to schools for examination purpose. As per the information available on their website i.e.www.ei-india.com/downloads, ASSET is a tool designed by the applicant for personalized learning by the users.
4.4 It has been submitted that applicant has explained in Management Mybook 2018 as to why ASSET should be used by the schools, which is as follows –
Why ASSET?
A one of its kind, national level benchmarking test, Assessment of Scholastic Skills through Educational Testing (ASSET) provides feedback on real learning to students. It pinpoints their academic strengths and weaknesses thereby giving them an accurate picture of where they stand with respect to their peers.
It helps improve the overall perspective of a school by pointing out skills that need improvement. The reports provide better directions for programmes like teacher training and capacity building.
It provides key insights to teachers about where their students stand with regards to the different skills, when compared with other sections and other schools. It also provides practice questions that can be used to reinforce concepts in weak skills.
Students get a personalised report which highlights their strong and weak skills. Practice questions for the weak skills are also provided.
4.5 From the above referred information, ASSET is a benchmarking test for school and not examination conducted by the school in respect of their core activity i.e. Education upto the level of higher Secondary. Further, GAAR has observed that “ASSET exam is conducted without any pre /post teaching business with the school” and”under ASSET, they do not provide any pre or post exam teaching to the students”, whereas in Management Mybook 2018, it has been mentioned that the ASSET provides ‘feedback’ on real learning to student. They also provide them personalized report which highlights their strong and weak skills and practice question for weak skill in order to reinforce concepts in weak skills.
4.6 Further, it has been submitted that the applicant, in Student Mybook 2018 explained to parents, “what is ASSET”. Content of the Student Mybook 2018 is reproduced below for ready reference –
Make ASSET your child’s ASSET !
Dear parent,
This Mybook is a personalized and comprehensive tool that will not only help you understand your child’s performance but will also help him/her improve on the weak areas. We urge you to go through this Mybook, along with your child. You can use this Mybook in the following ways :
