Monday, 13 March 2017

Amendments regarding Educational Institutions under Mega Exemption Notification No 25/2012-Service Tax

Central Government vide Notification No. 10/2017-Service Tax, dated: March 08, 2017has amended the clause 9(b) of Mega Exemption Notification No. 25/2012 where by restricting the scope of exemptions.   

Clause 9(b) of Mega Exemption Notification No. 25/2012 – Service Tax dated 20.06.2012 provides exemption from service tax to services provided to an educational institution, by way of, -
  1. Transportation of students, faculty and staff;
  2. Catering, including any mid-day meals scheme sponsored by the Government;
  3. Security or cleaning or house-keeping services performed in such educational institution
  4. Services relating to admission to, or conduct of examination by, such institution
Educational Institutions has been defined in Mega Exemption Notification as follows:
"educational institution" means an institution providing services by way of:
  1. pre-school education and education up to higher secondary school or equivalent;
  2. education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force;
  3. education as a part of an approved vocational education course.
In this regard, Central Government vide Notification No. 10/2017-Service Tax, dated: March 08, 2017 has amended the clause 9(b) of Mega Exemption Notification No. 25/2012 – Service Tax to provide that, w.e.f 1st April 2017, exemptions provided therein are applicable only to the institutions providing services by way of pre-school education and education up to higher secondary school or equivalent. Thus, institutions other than above will not be entitled to exemption.

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