Taxability of Goods and Services Purchased by State/Central Examination Boards Under CGST/SGST Act, 2017
Query:-
Whether State/Central Examination Boards are liable to pay GST on purchase of various goods and services from different vendors and if yes, whether Input Tax Credit shall be available?
Analysis & Advise
To answer this query we need to know the legal provisions regarding-
(a) Taxability of goods and
(b) Taxability of services
Supplied to State/Central Examination Boards.
a. Taxability of goods supplied to State/Central Examination Boards
There is no notification or circular issued by the GST Council till date which specifically exempt supply of goods to State/Central Examination Boards. Accordingly any vendor supplying goods to State/Central Examination Boards shall collect GST as per applicable rate.
Further, Input Tax Credit (ITC) shall not be available to State/Central Examination Boards because all services rendered by them are exempted vide entry no.66(a) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017
b. Taxability of Services supplied to State/Central Examination Boards
There is no notification or circular issued by the GST Council till date which specifically deals with taxability of services purchased by State/Central Examination Boards.
However, Notification 12/2017-Central Tax (Rate) dated. 28. 6. 2017 (Sl. No. 66) states that certain services purchased by an educational institution are taxable at NIL rated. The relevant provision is being reproduced below for ease of reference-
Services provided –
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;
(iii) security or cleaning or house-keeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution; upto higher secondary:
Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent.
For the purposes of exemption under GST the term “educational institution” has been defined in 2(y) of above said Notification No.12/2017-CT (Rate) and the same reads as under:
2(y) “educational institution” means an institution providing services by way of,-
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force;
(iii) education as a part of an approved vocational education course;
It is pertinent to mention here that GST Council vide notification number 14/2018-Central Tax (Rate) dated 26/07/2018 issued explanation and stated that:-
(iv)For removal of doubts, it is clarified that the Central and State Educational Boards shall be treated as Educational Institution for the limited purpose of providing services by way of conduct of examination to the students.
Note: In other words we can say that Central and State Education Boards shall be treated as “Educational Institutions” with respect to purchase of goods and services which is related with providing services by way of conduct of examination to the students.
From the above discussion it is crystal clear that State/Central Examination Boards are treated as “Educational Institutions” for conduct of examination to students only. Accordingly, any services purchased from vendors with respect to conduct of examination to student is taxable at NIL rated vide entry no. 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 and therefore State/Central Boards are not require to pay GST, but where services purchased by the State/Central Board are not related with the conduct of examination to students, it should be taxed at applicable rate.
Input Tax Credit (ITC) shall not be eligible because services provided by State/Central Examination Board is exempted vide entry no.66(a) of above mentioned Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017
Based upon the above discussion taxability of some important services purchased by the State/Central Boards are specifically tabulated as below:-
| Serial No. | Nature of serviced purchased by State/Central Examination Board | Taxability | Reference to notification |
| 1 | Transport services provided to staff for the purpose of conducting of examination to students such as visit to examination center etc. | Exempt | 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 2 | Transport services provided to staff not for the purpose of conducting of examination to students. | Taxable at applicable rate | Not covered by 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 3 | Transport services for carrying of answer script related to examination of students | Exempt | 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 4 | Printing, dispatch of admit cards related with examination of students | Exempt | 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 5 | Examination form related services for conducting examination of students | Exempt | 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 6 | Answer book related services for conducting examination to students | Exempt | 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 7 | Security Guard Services not related with conducting examination to students. | Taxable at applicable rate | Not covered by 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 8 | Housekeeping Services related with office of Board | Taxable at applicable rate | Not covered by 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 9 | Legal, consultancy Services not related with the examination of students | Taxable at applicable rate | Not covered by 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
| 10 | Any other services not related with the conduct of examination of students. | Taxable at applicable rate | Not covered by 66(b)(iv) of Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017 |
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