This advance ruling was pronounced by Authority for Advance Ruling in Karnataka in case of Sri Sairam Gopalkrishna Bhat on 21.01.2022.
Applicant had sought advance ruling on the below mentioned questions:
- Whether the income earned from conducting guest lectures amount to or results to as taxable supply of service?
- Whether income earned from research and training projects funded by ministries of government of India and state government of Karnataka, amount to or results to as taxable supply of service to be taxed at Nil rate as per Heading 9992?
- Whether the income earned from Research and training projects funded by ministries of government of India and state government of Karnataka, amounts to or results to as Taxable Supply to be taxed at (Integrated Tax) 18% under heading 9983?
Facts of the case:
Applicant is a professor of law at National law school of India University, Bengaluru and is engaged in classroom teaching and training for students and other personnel and get paid by Educational institution.
The applicant states that he provides teaching and training services under projects funded by Government of India and state government of Karnataka.
Applicants interpretation of Law:
Applicant said that he is engaged in classroom teaching and training of students and other personnel and thus the training and coaching provided by him are mostly recreational activity relating to art and culture and as such is not taxable under entry 80 of Notification No. 12/2017 chargeable at Nil rate.
The applicant is of the view that the training and education provided by him is on law, legal awareness and the like relates to art and culture and is engaged for recreational purpose to break the monotony of classroom lectures, by engaging guest faculty who are able to convey the subtleties of law in a recreational manner. Since all this is recreational activity it will not be liable to tax.
Further, the applicant said that the service provided by him to government of India and government of Karnataka are pure service and hence falls under item 3 of notification no. 12/2017. Also, as per item 72 of notification no. 12/2017 services provided central government, state government etc for which all expenses are borne by central government, state government etc. and hence such services are non-taxable supply of service and hence exempt from tax.
Observation and Ruling:
The services provided by the professor are related to law and not art or culture. Hence, the contention of applicant that the services provided by professor is art or culture is not tenable.
Hence, the guest lectures provided by professor are covered under entry no. 11/2017 and hence liable for tax at 18%.
Further, in order to claim exemption under entry 72, two conditions must be fulfilled:
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- Training and services is only provided to Central government, state government and union territory administration.
- Total expenditure is borne by Central government, state government and union territory administration.
The MOU is signed between applicant and various ministries of government, however no details have been provided with regard to the recipient of service and hence it does not fulfill the above conditions and thus the same is taxable.
To read the full Ruling CLICK HERE.
Do note that advance ruling is only applicable on the applicant who has sought it and cannot be used by other persons as a precedent.
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