Services provided to educational institutions – Exemption clarified
26th September, 2013
Services like hostels,
housekeeping, security, canteen and transport services to ferry students are
exempted from service tax if provided to an educational institution. These
services are exempted if the same are provided in respect to service which is
exempt/not liable to service tax.
CBE&C Circular No. 172/7/2013-ST, dated 19-9-2013, clarifying the issue,
states that apprehensions of certain educational institutions and
organizations, regarding levy of service tax on certain services relating to
the education sector, have no basis whatsoever and that all services relating
to education are exempt from service tax. It quotes Section 66D(l) of the
Finance Act, 1994, along with Sl. No. 9 of exemption under Notification No.
25/2012-ST and the definition of “auxiliary educational services” as provided
in the exemption notification.
Section 66D specifies the
negative list of services which are not liable to tax and Sl. No. 9 of
notification ibid grants exemption to auxiliary educational services when such
service is provided to an educational institution in respect of education
exempted from service tax.